**U.S. Dollar Approaches Weekly Lows: In-Depth Overview of Major Forex Pairs Including EUR/USD, GBP/USD, USD/CAD, and USD/JPY**
*Based on the original article by Vladimir Zernov, FX Empire*
The U.S. dollar faced increased selling pressure during mid-April 2024, dipping toward its weekly lows as forex traders responded to evolving macroeconomic signals, rate policy expectations, and geopolitical developments. This decline in the greenback influenced major currency pairs, including the euro, British pound, Japanese yen, and the Canadian dollar. Analysts and traders are closely watching the Federal Reserve’s next move, with speculative sentiments pricing in potential changes to interest rates and risk appetite in global markets.
This extended analysis explores the latest movements in EUR/USD, GBP/USD, USD/CAD, and USD/JPY based on technical indicators, fundamentals, and macroeconomic context, while offering insights into their medium-term outlook.
## Market Overview
The ICE U.S. Dollar Index (DXY), which tracks the dollar against a basket of six major world currencies, has slipped significantly after reaching highs earlier in April. The retreat is attributed to several factors:
– Federal Reserve’s cautious approach to interest rate hikes.
– Softer-than-expected economic data from the U.S.
– Renewed risk appetite in global equity markets, which is dragging demand away from the safe-haven U.S. dollar.
– Rising yields elsewhere, particularly in Europe and Japan.
With the dollar weakening, the following key currency pairs are seeing notable price action.
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## EUR/USD: Euro Extends Gains on Dovish Dollar Mood
The EUR/USD pair rallied to around 1.0680 following consistent buying in the past few sessions, rebounding from earlier lows.
**Key Drivers:**
– The euro is benefiting from the recent softness in U.S. economic indicators, such as retail sales and industrial production numbers.
– Despite a growing divergence in rate policies between the ECB and Fed, the euro found support from easing short-term treasury yields.
– Risk-on sentiment is pushing investors into higher-yield and growth-oriented assets, helping lift the euro.
**Technical Analysis:**
– EUR/USD recently crossed the resistance at 1.0650, turning it into support.
– The next major resistance is near 1.0700. A sustained break above this level could trigger further upside toward 1.0750.
– RSI on the daily chart suggests a mild bullish momentum, though not overbought yet.
– 50-day moving average remains below key resistance, potentially confirming a short-term uptrend.
**Near-Term Outlook:**
– If U.S. economic data continues to show weakness, the euro could gain more ground.
– ECB statements this week will be crucial, particularly regarding inflation management and monetary policy.
– A breakout above 1.0700 could serve as a signal for bullish continuation toward 1.0800.
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## GBP/USD: Pound on the Rise Amid Stronger UK Data and Dollar Weakness
The pound sterling rose toward 1.2440 during midweek trading as the U.K. economy showed signs of resilience.
**Key Drivers:**
– Improved GDP forecasts and labor market strength in the UK encouraged optimism about the British economy.
– Bank of England (BoE) indicated that any rate cuts are not imminent despite cooling inflation, which is helping the pound.
– Traders are reducing long-dollar positions, further fueling GBP demand.
**Technical Analysis:**
– GBP/USD cleared resistance at 1.2400, a psychologically important level.
– Next resistance levels:
– 1.2500 (psychological barrier).
– 1.2530 to 1.2580 (historical supply zone).
– Support remains around 1.2350 and 1.2300 as short-term retracement zones.
– MACD indicator shows growing bullish divergence.
– Price action is flirting with the 100-day exponential moving average,
Read more on USD/CAD trading.