The U.S. dollar rallied in the past three weeks as traders adjusted expectations for monetary policy easing by the Federal Reserve. Revised forecasts now anticipate only 80 basis points of rate cuts for the year, a significant decrease from the initial 160 basis points. The repricing of the Fed’s policy outlook has lifted the U.S. dollar across the board, driving the DXY index up by about 1.8%. The week ahead will see the release of the FOMC minutes and the S&P Global PMIs for February, giving valuable insight into the current state of the U.S. economy.
Looking beyond fundamental analysis, the article delves into the technical outlook for the major U.S. dollar pairs: EUR/USD, USD/JPY, and USD/CAD. For EUR/USD, confluence resistance around 1.0800 will act as the first line of defense against further gains, while support is seen at 1.0700. For USD/JPY, if the pair loses upward momentum, support emerges at 150.00, followed by 148.90. Finally, for USD/CAD, resistance is spotted at 1.3545 and 1.3585, with support ranging from 1.3480 to 1.3460.
The U.S. dollar has seen significant gains following the revised expectations for monetary policy easing by the Federal Reserve. The coming week will see the release of key economic data, shedding light on the current state of the U.S. economy. From a technical standpoint, significant price thresholds are identified for the major U.S. dollar pairs, offering traders valuable reference points for the upcoming sessions.
