EUR/USD currency pair managed to rebound after Easter holidays forming an impressive rally that reflects the weakness of the greenback.
In the first week of the month, the pair hovered near 1.13 – 1.14 levels. However, at the third week of the month, the pair pulled back and traded between 1.1218 and 1.1309. The euro showed weakness against the dollar. With the sharp losses, the euro dropped to its lowest level against the dollar since March 29.
EUR/USD slipped down to its lowest level in a month after Mario Draghi announced in the post-meeting conference that the European Central Bank may cut interest rate even further in the coming months. Traders continued to speculate on Mario Draghi' dovish comments till the end of the month.
The US dollar is expected to remain volatile Excon Fuji Securities says as its due to the uncertainty surrounding the Federal Reserve policies. Through the month, the EUR/USD finally climbed above the 1.1212 level, which is considered a big break to the upside. However, this old level of resistance may eventually become new support, especially with the Fed takes dovish tone.
This month, Reuters ran a poll in which the majority of respondents expected that Federal Reserve would hold rates firm at the next meeting before approving a rate hike in June. Rate hikes by the Federal Reserve this year will be considered bullish for the dollar, as traders pile into the greenback in an effort to invest in higher yields.
