Weekly Currency Outlook Of 06-03-2021 By Swastika Investmart
FUNDAMENTALS OF CURRENCY:
* The dollar gained in early European trading Friday, after Federal Reserve Chairman Jerome Powell largely dismissed concerns over rising Treasury yields. The Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.1% at 91.760, a threemonth high. These dollar gains came on the back of the benchmark 10-year Treasury yield jumped back above 1.5%, rising as high as 1.58%, not far off the one-year peak of 1.61% it reached last week.
* All throughout the beginning of 2021 the British Pound was a strong outperformer in the FX space, reaching 3-year highs against the likes of the US Dollar. There is a scarcity of UK economic data next week so momentum is likely to remain focused on the bond market and the reaction of Central Banks, which has overshadowed the vaccination rhetoric from the last few weeks. despite the recent sell-offs in the pound, GBP/USD is still hovering above the level seen at the beginning of February, and a recent fall below the lower bound of a rising trend suggests that corrective selling is not yet overdone.
* The Euro has plummeted during most of the week to reach down towards the 1.19 level, which of course is an area that we had seen previous resistance formed. The Euro initially tried to rally during the course of the week, but then broke down significantly towards the 1.19 level. The 1.19 level is an area where we have seen a lot of resistance, and now should see plenty of support.
Technical indicators (Daily):
* RSI- 42.5904
* MACD- -0.1368
* MOVING AVERAGES (20,50,100)- (72.9516/73.3742/73.6152)
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