Dollar Slides as Risk Premium Unwinds
The US Dollar Index took a tumble of roughly 1%, breaking below the 99 mark and wiping out the gains it had made recently with all the Middle East tensions. It all came after Washington announced a two-week ceasefire with Iran on one condition, which helped ease up the worries about any Strait of Hormuz disruptions.
Analysts say the rapid unwinding of safe haven positions has started with oil prices plummeting and stock market futures taking off. The scene has been set for the dollar to give up some ground, showing how at the moment geopolitical factors are more important than interest rate expectations in determining short term price movement.
Euro Gains as Mood Shifts Around
The euro had a pretty good day and hit some multi-week highs thanks to a global risk appetite that’s on the upswing and reduced concerns about energy supplies. Since Europe is right in the firing line for energy shocks, when tensions ease, it gives them a bit of a relative boost.
Traders also mentioned that people are simply adjusting their positions as the dollar shorts got going in a big way in the wake of that announcement.
Sterling Extends Winning Streak
The pound has been on a roll for three days now and the dollar’s weakness was right there for the taking, with renewed interest in risk-linked currencies also helping it along.
Now it’s time to wait and see if the ceasefire holds up, because if not, currency volatility is likely to stay high while the geopolitical story still has a lot the say in how the markets go.
EUR/USD Price Forecast
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See all EUR/USD forecastsDXY Technical Outlook: Breakdown Signals Bearish Shift

The US Dollar Index has finally broken below 99.50-99.60, only to find the bottom of that support zone. And so, it slips under a trendline that had kept the price afloat since early march. As a result we have a trend structure shift with lower highs forming – after getting rejected near 100.60.
Its now below the 50 day sma and the 200 day sma at 99.30 is getting the squeeze too. The RSI is down around the 30-35 zone which is a telling sign of strong bearish momentum and potential for the price to get a bit oversold
A hold below 99.30 could see the losses extend down to 98.50 while any recovery must get back up to 100 before we can start to think differently. Right now, momentum is pretty clearly in favour of the sellers.
GBP/USD Technical Outlook: Rally Extends Toward Key Fibonacci Resistance

GBP/USD has had a pretty sharp rally and managed to break above 1.3300 and reclaim that trendline resistance too. So, it looks like a bullish continuation – now we’re looking at fibonacci resistance at 1.3470.
The picture is a pretty clear one with higher lows coming in and supported by an upward sloping trendline – and all the signs are pointing to a sustained buying rally. The RSI has also broken above 70 which is another sign that buyers are feeling pretty confident
A hold above 1.3300 keeps the buyers in the driving seat – but a failure to do so and this is likely to trigger a pullback to 1.3200. At the moment though, momentum is very much with the buyers.
EUR/USD Technical Analysis: Breakout Confirms Bullish Momentum

EUR/USD has had a pretty strong breakout above 1.1620 and cleared the 50 day sma and the descending trendline too. This all points to a bullish reversal picture with higher lows now coming good and momentum really picking up.
Price is now just approaching the 200 day sma at 1.1700 – that’ll be one to watch. The RSI has surged above 70, which is a good indication of strong momentum – but also that the market might be getting a bit overbought
If price can hold above 1.1620 then maybe we see some upside to 1.1750, however a pullback is likely to retest the breakout zone. The structure at the moment is pretty clear on this one – buyers in control
