On Wednesday, the U.S. dollar index fell by one-third of a percent, attempting once again to break through its 200-day moving average (MA). Perhaps the principle of "if it doesn't rise, it falls" can be applied to the dollar.
In early February, the dollar managed to consolidate its position above this line with a dramatic rise, but this did not bring it into the growth zone that people expected. In November and December last year, signals that the next move would be a rate cut nearly depreciated the dollar by close to 6%. With predictions for the first rate cut being pushed from March to June, and the number of cuts this year reduced from six to three, the dollar was only able to recover half of its losses.
Alex Kuptsikevich, a senior analyst at FxPro, points out: Despite positive fundamentals, the performance of the dollar has been lackluster, indicating impressive selling pressure. The dynamics of the dollar index show that since late February, market sentiment has changed, with the DXY showing a downward trend on each trading day in March.
It might still be too early for dollar bulls to celebrate this long-fought turnaround, as the dollar has been hovering below its 200-day moving average since late January.
Regarding the U.S. dollar index, breaking below 103.0 would be a significant signal for a breakthrough in the upward trend, leading directly down to 102, and further up to 100.50. For the euro against the dollar, momentum and the ability to break through the December high of 1.11 in the 1.0960-1.1000 zone will be crucial. For the British pound against the dollar, the focus will be on the 1.2750-1.2800 area.
Meanwhile, the euro against the dollar and the British pound against the dollar have already achieved modest victories, continuously rising above the 200-day moving average and consolidating above the 50-day average level at the beginning of March.
