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US Dollar Outlook: DXY, EUR/USD, GBP/USD Key Technical Levels

US Dollar Outlook: DXY, EUR/USD, GBP/USD Key Technical Levels

Tammy Da Costa, Analyst

US Dollar Technical Outlook: Neutral

  • USD strength dissipates temporarily as investors price in rising geopolitical tensions
  • GBP/USD falls back to critical support
  • EUR/USD threatens trendline resistance

The US Dollar has maintained a bullish stance as prospects of a rate hike and an increase in risk-off sentiment supported the safe haven greenback.

Following a week of turmoil, heightened geopolitical risks and elevated volatility; the USD climbed higher against most major currencies as investors sought refuge in the Dollar’s safe-haven appeal.

Although fundamentals continue to drive risk sentiment, technical factors will likely assist in the catalyzation of price action for the imminent move.

US Dollar (DXY) Technical Analysis

After the formation of a death cross on the weekly time-frame, DXY has maintained its strength against major currency pairs as the unprecedented outcome of the conflict between Russia and the Ukraine continues to support the demand for safe-haven currencies/assets.

Over the past few weeksDXY(Dollar basket) has remained encapsulated between the key psychological levels of 96.00 and 98.0 which continue to provide both support and resistance for the short-term move.

After the development of a potential rising channel on the daily chart, DXY managed to retreat from the 38.2 retracement handle of the 2017 – 2018 move at a level of 97.88 (resistance) while the CCI (commodity channel index) continues to threaten overbought territory.

With the longer-term upward trajectory currently intact, sustainability of price action above the 50 MA or above 97.88 could see prices surging back towards the major resistance level of 100.

US Dollar (DXY Weekly Chart)

US Dollar Outlook: DXY, EUR/USD, GBP/USD Key Technical Levels

Chart prepared by Tammy Da Costa using TradingView

EUR/USD Technical Analysis

EUR/USD has managed to stabilize between the key Fibonacci levels of the 2020 – 2021 move, providing support and resistance between the respective levels of 1.103 and 1.148. As price action continues to threaten the declining trendline, the 50-week moving average (SMA) will likely continue to provide additional resistance for the pair.

EUR/USD Weekly Chart

US Dollar Outlook: DXY, EUR/USD, GBP/USD Key Technical Levels

Chart prepared by Tammy Da Costa using TradingView

GBP/USD Technical Analysis

After rebounding off of the 38.2% Fibonacci retracement level of the 2018 – 2020 move at 1.324, GBP/USD bulls managed to drive prices higher before facing a wall of resistance at the upper bound of the descending channel which now holds as support at around 1.340.

GBP/USD Weekly Chart

US Dollar Outlook: DXY, EUR/USD, GBP/USD Key Technical Levels

Chart prepared by Tammy Da Costa using TradingView

If price action rises above 1.358 and 1.360, bulls may have the opportunity to retest the January high at 1.375 with a break of 1.33 bringing the next layer of support into play at 1.316

--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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