US Dollar, EUR/USD, USD/CAD Talking Points:
- The US Dollar[1] continues to show strength, setting a fresh four-month-high earlier today.
- EUR/USD[2] appears to be the big loser as the pair is setting a fresh four-month-low while other major pairs such as AUD/USD[3] or GBP/USD[4] appear more subdued, finding support around 1-2 month lows.
- The analysis contained in article relies on price action[5] and chart formations[6]. To learn more about price action or chart patterns, check out our DailyFX Education[7] section.
There’s been a chorus of Fed speakers commenting on markets this week and the net result so far has been a bullish push in the US Dollar, with the currency pushing up to fresh four-month-highs.
To be sure, the Fed continues to say that they’re going to be as accommodative as needed in the near-term, and that there’s no plans to remove the massive support that’s been in-place now for a year. Powell has also went as far as saying that he feels inflationary pressure is transitory, and even if it’s not, Powell has said that the Fed has tools at their disposal to address the issue.
We have seen some softening in Treasury rates over the past week but the US Dollar has continued to trade-higher. There could be some additional push to the USD[8] on the back of Euro[9] and even GBP[10] weakness, as Covid has created even more near-term uncertainty on the European continent and many countries are going back into lockdown. This, of course, could prolong the recovery theme in Europe and may lead to a bit of continued re-pricing as the
