U.S. Dollar Rebound To Continue?

What we saw last week was a sharp U.S. dollar rebound after hawkish comments from the Federal Reserve and still-elevated inflation raised doubts on whether the Fed will pause rate hikes at their next meetings. Since recent Fed speak has tilted toward the hawkish side with some central bankers hinting at the probability that the central bank may not be done raising rates. A speech from Fed chair Jerome Powell is scheduled for Friday. Further concerns remain meanwhile around the debt ceiling while Treasury Secretary Janet Yellen made clear that if raising the debt ceiling is not forthcoming, there will be damage to the U.S. economy and financial markets.

GBP/USD

The pound ended last week lower against the greenback, exiting its recent upward trend channel and entering oversold territory. Meanwhile, the 1.25-mark remains a crucial price level. If sterling is able to climb back above 1.25, the focus shifts back to a resistance around 1.2550-1.26. If 1.25 cannot be recaptured further losses are likely with a potential test of a lower support at 1.2350.

EUR/USD

Taking a look at the weekly chart, a correction from high price levels seemed inevitable and reasonable. Even though the pair entered in shorter time frames oversold territory we prepare for further losses towards 1.0750. However, a crucial support zone ranges from 1.0650 to 1.05 which is likely to dampen selling pressure.

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