EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – Exhibiting Caution Ahead of Powell Testimony

U.S. Dollar

The U.S. Dollar Index (DXY) experienced slight fluctuations at the beginning of a critical week for global markets. Key events such as Britain’s budget announcement, a European Central Bank (ECB) meeting, U.S. employment data, and significant political developments in China and the U.S. are anticipated.

The financial community is exhibiting caution, anticipating Federal Reserve Chair Jerome Powell’s testimony and the U.S. payroll data. Recent job growth has been robust, and another strong report could influence Federal Reserve policy expectations. Currently, the market anticipates a series of interest rate cuts starting in June.

Although the trend is down, the US Dollar is trying to establish support across the 200- 4H Moving Average at 103.737 A failure to hold this moving average could spell trouble for the bulls with the next major support, the 50-4H Moving Average lurking at 103.310.

EUR/USD

The euro is seeing an increase against the dollar, reaching $1.0867. This movement comes amidst cautious trading behavior as investors await impactful updates from major central bank meetings and economic data releases.

The ECB meeting scheduled for Thursday is another focal point, with most policymakers expressing reluctance to cut interest rates soon. Additionally, Super Tuesday in the U.S. will be a significant political event.

Technically, today’s 0.09% rise has the EUR/USD in a position to challenge the 50-4H Moving Average at 1.0869. Look for sellers on the first test of this level, but be prepared for an acceleration to the upside if buyers can trigger a breakout.

On the downside, support is the 200-4H Moving Average at 1.0827

GBP/USD

Sterling is gaining ground against the dollar on Monday. Market participants are closely watching the upcoming British budget, where Finance Minister Jeremy Hunt is expected to address tax cuts speculation.

Technically, GBP/USD prices soared when buyers drove the Forex pair decisively over the 50-4H Moving Average at 1.2673. This is new support. The market is rapidly approaching another potential breakout level at 1.2709. Overcoming this level will put 1.2772 on the radar.

USD/CAD

The USD/CAD is edging higher on Monday. Weakness in the gold and crude oil markets are weighing on demand for the commodity-linked Canadian Dollar. Uncertainty ahead of Wednesday’s Bank of Canada Rate Statement and interest rate decision are also driving the volatility.

Technically, the USD/CAD is in an uptrend on the 4-hour chart despite today’s volatilile, two-sided trade. Traders are anticipating a surge if buyers can overcome 136.06. Conversely, 1.3541 looks like the trigger point for the start of a steep break.

USD/JPY

The dollar showed a slight rise of 0.2% against the Japanese yen, reaching 150.42 yen, while remaining relatively stable against other major currencies. The Japanese yen hovered around the 150-per-dollar level, reflecting a cautious approach in the market.

The USD/JPY has been flat-lining for a few days since its recent breakout to the upside. Despite being well above support, it remain vulnerable to a near-term correction with the next downside target the uptrending 50-4H moving average at 147.386.

For a look at all of today’s economic events, check out our economic calendar.