**EUR/USD, USD/JPY, and AUD/USD Forecast: The US Dollar Stages Early Recovery on Monday**
*Adapted from Christopher Lewis, FXEmpire; expanded with updated market context and analysis.*
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**Introduction**
The foreign exchange market opened the week with notable movements among the world’s major currency pairs. The US Dollar (USD) showed resilience early on Monday, recovering some of its lost ground amid evolving global economic conditions. Key pairs such as the EUR/USD, USD/JPY, and AUD/USD each navigated a distinct blend of technical and fundamental influences, reflecting broader trends in monetary policy, risk appetite, and geopolitical developments. In this analysis, the performance, technical outlook, and underlying factors impacting each pair are explored, providing traders and investors with an informed perspective for the week ahead.
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### US Dollar Overview
– The US Dollar Index (DXY), which measures the greenback against a basket of major currencies, rebounded in early Monday trading following a sluggish previous week.
– The dollar’s recent performance has been shaped by shifting expectations regarding US Federal Reserve interest rate policy, ongoing inflationary pressures, and global economic headwinds.
– Positive US economic data, including robust payroll figures, have solidified market expectations of a cautious Federal Reserve, reducing prospects for imminent rate cuts.
#### Key Drivers Behind the US Dollar’s Movement:
– **Federal Reserve Policy:** Hawkish comments from policymakers have played a significant role in supporting the dollar. FOMC members have reiterated the need for patience on rate cuts until clearer evidence of sustained disinflation appears.
– **Global Risk Sentiment:** Periodic spikes in risk aversion due to geopolitical tensions or global growth concerns have driven capital toward the safe-haven US Dollar.
– **Recent Data Releases:** US labor market strength and better-than-expected GDP readings have further bolstered the greenback.
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### EUR/USD Analysis
The Euro-to-Dollar pair remains a bellwether for global currency markets, influenced by divergences in US and European monetary policy and broader risk sentiment.
#### Recent Performance and Technical Picture
– EUR/USD began the week under pressure as the dollar strengthened, pulling the pair down from recent highs.
– Technical resistance near the 1.0900 level remains formidable, with sellers emerging as the pair approaches this area.
– The 50-day and 200-day Exponential Moving Averages (EMAs) are converging, suggesting a period of consolidation but also highlighting the importance of these dynamic support and resistance levels.
#### Support and Resistance Levels
– **Immediate Resistance:** 1.0900 (psychological and technical ceiling)
– **Next Key Resistance:** 1.1000 (historical resistance, potential breakout point)
– **Immediate Support:** 1.0800 (minor support)
– **Major Support:** 1.0700 (multi-week base, increased bullish interest)
#### Influencing Factors and Outlook
– **ECB Policy:** The European Central Bank has signaled caution, keeping policy statuses
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