In early European trading on Monday (April 19), the dollar fell to a low of 91.28, the lowest since March 4, as the dollar suffered an across-the-board sell-off. EUR / USD broke through 1.20 to as high as 1.2015; USD / JPY fell further to as low as 108.223; spot gold continued to rise to as high as US $1786.69 / oz.
Euro: EUR / USD rebounded to 1.20 at the beginning of the week as US bond yields fell. In response, FXStreet analyst Yohay Elam wrote that to break through the key 1.20, the next key levels are March and February levels, including 1.2025, 1.2065 and 1.2115, with support at a daily low of 1.1945, followed by 1.1925 and 1.1860.
An increase in vaccination rates in Europe is likely to boost the euro, while a faster pace of vaccination is far from being factored into the euro's trend. Demand from US consumers has a knock-on effect and may also boost the European economy. In the short term, this "risk appetite" is good for the euro against the dollar.
Rabobank believes that if EURUSD can break above 1.20, it could hit 1.22, but EURUSD is expected to trade in the 1.17-1.20 range in the coming months as the dollar's fundamentals are stronger than last year.
Yen: the dollar / yen fell near a four-week low. The USDJPY came under some new selling pressure on the first day of the new trading week and now seems ready to extend its recent pullback from the 111.00 mark or one-year high. This is the fifth day of the first six trading days fell, is caused by a variety of factors.
Renewed global concerns about another dangerous wave of novel coronavirus infection have damaged global risk sentiment and benefited the safe haven status of the yen. Bearish traders took further clues from the moderate tone around Treasury yields and the general dollar selling preference.
Despite the upcoming strong US economic data, investors seem confident that the Fed will keep interest rates near zero for an extended period of time. That, in turn, pushed the yield on the benchmark 10-year Treasury note down further from its one-year high of 1.7760% hit in march and depressed the dollar.
Given the continued weakness below 109.00 last week, the decline could be further attributed to some technical selling. A subsequent fall below the 108.40-35 range would be seen as a new trigger for bearish traders and pave the way for further declines in the absence of relevant market impact economic data.
Foreign exchange strategists at United overseas Bank Group (UOB Group) expect the USDJPY to fall back to around 108.0 in the coming weeks. On the upside, breaking through the strong resistance level of 109.20 (previously 109.40) will indicate that the correction that began about two weeks ago is over.
Spot gold: last week, gold posted its biggest weekly gain since 2021. Eren Sengezer, an analyst at FXStreet, believes that if Treasury yields fall, gold could reach $1800.
A sustained rise of $1784 through channel resistance could trigger gold to rise again to its target of $1796. On the downside, if the gold price one-hour chart closes below the 21-hour moving average of $1777, the test channel will support $1773.
From a technical point of view, the daily closing price of gold / dollar above $1785 (with a downward trend of 38.2% Fibonacci from January to March) could open the door to a further rise to $1800 (psychological barrier) and $1805 (100-day moving average).
The initial support level is at $1755 (static level, 50-day moving average), followed by $1745 (pre-resistance) and $1735 (20-day moving average). According to the current technical side, only a daily closing price of less than $1755 can be regarded as an attractive trend for sellers.
