Euro bulls aim at the 1.10 mark! Is the end signal of the US dollar decline ending? The five major currencies will play the key position next week!

Aihua Foreign Exchange APP News-This week (March 11-March 15), the global foreign exchange market showed significant differentiation under the game of multiple factors. The conclusion of the German fiscal agreement has driven a strong rebound in the euro. The risk of the US government shutdown has temporarily alleviated and supported the resilience of the US dollar. The weak British economic data, the Bank of Japan's expectations of the ban, and the Canadian Prime Minister's election have been reported, respectively, on the pound, the yen and the US dollar: policy expectations and inflation pressures have tug-of-saw fundamentals. The Democratic leader of the US Senate, Schumer, expressed support for the temporary funding bill, implying that the risk of the government shutdown has decreased, partially alleviating market concerns about short-term liquidity. However, the University of Michigan's consumer confidence index plummeted to 57.9 (previously 64.7), hitting a new low since November 2022, with consumers' concerns about rising prices caused by "tariff rhetoric" and frequent changes in economic policies. The 12-month inflation expectations jumped to 4.9% (previously 4.3%), and the five-year inflation expectations reached the highest 3.9% since 1993, indicating a correction in the market's expectations for the Fed's rate cut pace. Analysts at well-known institutions pointed out that high inflation expectations may force the Fed to maintain interest rates, but deterioration in consumer confidence may limit the upside potential of the dollar. Technically, the US dollar index fell slightly by 0.08% in the week to close at 103.75. The daily Bollinger Band (middle rail 106.05) showed a closing pattern, and the price was between the middle and lower rails, indicating a weak oscillation pattern. The MACD indicators DIFF (-1.0576) and DEA (-0.8643) converge below the zero axis, and the downward momentum weakens; RSI (44.22) is below 50 but is not oversold, and the short-term long and short forces are balanced. If indexBreaking through the middle rail pressure may trigger a rebound; on the contrary, the lower rail around 102.81 will become the key support. Euro: The fiscal agreement boosts bull momentum fundamentals, the German ruling coalition has reached an agreement on reform of the 500 billion euro infrastructure fund and lending rules, which is expected to be approved by parliament next week. The head of strategy for well-known institutions pointed out that this move will strengthen Germany's fiscal expansion expectations, coupled with the ECB's hawkish expectations that remained stable in April (current market pricing is dove), the short-term attractiveness of the euro has significantly increased. In addition, the euro against the pound and the US dollar: pay attention to the policy signals after the risk of the US government shutdown is lifted and the minutes of the Federal Reserve meeting. The technical aspect needs to confirm the effectiveness of the Bollinger Band mid-rail breakthrough. If it stands firmly above 106, the US dollar is expected to rebound; otherwise, the weak oscillation continues. Euro: The passage of the German fiscal agreement and the ECB hawks expected support for the upward trend, but the RSI is overbought to warn of the risk of a pullback. Breakthrough of 1.0971 may open up a new round of upward trend, otherwise technical retracement is needed. British Pound: Economic data has become a key variable, and the technical side needs to verify the effectiveness of mid-track support. If 1.2689 is stable, the bulls may accumulate power to hit the previous high; the deterioration of the data may trigger a deeper pullback. USD against the Japanese Yen: Bank of Japan holds the support of the BOJhttps://aihuaforex.comWith the expected expectation, the exchange rate may maintain a range of 148-150 fluctuations. We need to be wary of the amplification of volatility caused by the US inflation data exceeding expectations. Canadian dollar: Carney policy orientation and US-Canada trade relations dominate short-term trends. If the technical side exceeds 1.4510, the US dollar may turn stronger against the Canadian dollar; if the price falls below 1.4124, the Canadian dollar bulls will dominate. Next week, the market focus will focus on economic data of various countries (US retail, euro zone PMI, Bank of Japan resolution) and policy signals. Traders need to aihuaforex.combine technical patterns and fundamental dynamics, beware of the risks of reverse fluctuations after overbought/oversold, and flexibly respond to market changes.

The above content is about "[Aihua Foreign Exchange Decision Analysis]: Euro bulls are aiming at the 1.10 mark! The signal of the end of the US dollar decline has appeared? The five major currencies will play the key position next week!" The content is carefully aihuaforex.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!

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