Fear has reigned over the markets in the past week due to rising infections that forced renewed lockdowns in Europe, particularly in France, Germany, and Italy.
The bloc continues to struggle with the new COVID-19 variants, especially since a large percentage (about 91.5%) of its population remains unvaccinated against the virus. In a Bloomberg interview, European Central Bank President Christine Lagarde reiterated her views of a mid-2022 return to pre-pandemic levels.
Meanwhile, in the U.S., the Biden administration's $2 trillion infrastructure and economic recovery package plan helped pushed the greenback to its high point last week. Friday's jobs report was also conducive to dollar strength as the U.S. economy added 916,000 jobs from an expected 647,000 in March.
The dollar index appreciated 0.31% the entire week, and the EURUSD dropped by 2.17%.
From the chart above, it looks as though $93.2 would have to be challenged in the next five days to see more gains for the greenback. $92.45 would be a good support level as it coincides with the 200 MA and the main pivot line.
On the other hand, the weekly chart of the EURUSD is on the verge of breaking past multiple support levels as it held on to above 1.1700. The fiber closed below the 78.6% Fib retracement and grazed the 50 M.A. and the main pivot line. However, momentum is still tilted to the downside for this currency pair, with both bearish readings from the MACD and the Momentum indicator.
Long-term short setup
The AUDUSD is a particular currency pair that offers a compelling long-term sell trade after breaking below this year-long trendline that extended from March last year. The pair's best attempt to climb back up failed on March 17 and continued its slide last week. 0.7403 is likely an immediate support level.
Here's a recap of all the other winners and losers in last week's trading: