Pronounced weakness in certain counterpart currencies, a number of upbeat US data points and the Fed unanimously voting to hike interest rates by 25 bps, collectively lifted the US dollar higher by 0.97% (according to the US dollar index) last week.

Meanwhile:

  • The euro, the biggest G10 loser on the week, came under pressure amid events in Rome. Technically, the EUR/USD concluded the week down 1.23%, though a recently tested support area found on the daily timeframe at 1.1479-1.1583 could encourage a recovery phase this week.
  • The British pound began the week on a firm footing, though peaked at 1.3217 on Wednesday following the Federal Reserve’s monetary policy announcement, swiftly paring intraday gains to the 1.3160 neighbourhood. Dovish BoE commentary, as well as lower-than-expected UK data, exacerbated losses on Friday, pulling the unit beneath weekly support at 1.3047 into the week’s end.
  • The Australian dollar started the week off in the red, unable to shake off renewed global trade jitters after China formally declined to resume official talks with the US ahead of the latest batch of import tariffs. The Commodity currency rose in response to the Fed announcing a 25bps rate hike, reaching highs not seen since August 30. The move, however, failed to sustain gains beyond its 0.73 handle, swiftly pulling the market back to 0.7250s. Both H4 and weekly structure show support nearby in terms of the technical picture. 0.7183/0.72 is, therefore, on the watchlist this week for potential longs.

For a more in-depth technical view, feel free to check out IC Markets’s full report covering a number of different markets

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