As expected and stated in my previous analysis price rejected the support level at 1.26721 and retested Last Friday's High. Currently, price is range bound for the third day running and a significant breach of structure will be required to better understand if the market is fully bullish or not.
A breach and close above 1.27666 would make July 2023 High the next possible resistance level.
Alternatively, if price continues to be range bound and rejects the high at 1.27666, a move to 1.26721 would be likely.
The U.S. dollar, measured by the DXY index, weakened by around 0.35% to 102.13 on Tuesday due to declining Treasury yields, a trend that persisted following the Federal Reserve's recent policy shift.
The Fed, after its December meeting, adopted a more positive stance on inflation, initiating discussions about potential rate cuts and indicating plans to implement 75 basis points of easing in the upcoming year.
This departure from its earlier position marked a significant change in the Fed's outlook and contributed to the dollar's softened position in the market.
