The dollar has recovered significantly in recent weeks, rising from a three-year low, as the dollar index is currently trading at its highest level in seven weeks, supported by what the markets considered a positive tone from the new Federal Reserve Chairman Jerome Powell in his testimony before Congress on the US economy, Prompting the markets to maintain their expectations of a 4 rate hikes this year.
Currently, the dollar index has managed to exceed the resistance level we mentioned yesterday at 90.42, which represents the neckline of the double-bottom pattern, so it is expected that US dollar to continue rising to reach its highest level since the beginning of 2018 at 92 levels.
On the other hand, the euro fell to its lowest level against the US dollar in six weeks following the slowdown in inflation data that shocked the market expectations of the ECB easing or ending the monetary stimulus program this year, bringing EURUSD to the levels of 1.2175 and we are in front of the double top pattern, opening the door for targeting levels of 1.19.
The euro zone's political uncertainty may push the single currency further down as markets await the results of the Italian election on Sunday, as well as the German Social Democrats' vote on a coalition with Merkel's conservative coalition.
Also, sterling continued its decline as markets watched the UK-EU talks on Brexit terms and the speech of British Prime Minister Theresa May tomorrow. GBPUSD currently trades at 1.3740 levels, its lowest level in a month and a half.
In the oil market, prices fell for the third day as US inventories rose, record output, and the strength of the US dollar weighed heavily on the parties to the cut-off agreement. Crude oil is trading at $ 61.15 per barrel, while Brent crude is trading at $ 64.15 a barrel.
