The US dollar is falling continuously, will the ECB cut interest rates again?

Finance markets remained relatively calm early Thursday as investors awaited the European Central Bank (ECB) monetary policy announcement. The U.S. Economic Calendar will release the number of first-time unemployment claims and unit labor costs for the fourth quarter ahead of Friday's highly anticipated February jobs report.

The dollar continued to weaken against major currencies on Thursday despite the optimistic report from the ISM Services Purchasing Managers Index (PMI). U.S. President Donald Trump has decided to give the U.S. auto industry a month exemption of 25% of its tough tariffs imposed on Canada and Mexico this week. In addition, Bloomberg reported that Trump is also considering exempting tariffs on certain agricultural products. These developments brought the risk flow back, with major Wall Street indexes rising more than 1% on the day. Meanwhile, the U.S. dollar index fell more than 1%, hitting its lowest level since early November. In early trading in Europe on Thursday, the index consolidated sideways above 104.00.

Basic Forex Market Market:

The US dollar/Canadian dollar fell for the second consecutive day on Wednesday as the Canadian dollar gathered strength during the Asian trading session on Thursday and continued to fall to 1.4300. Similarly, the US dollar/Mexican peso fell about 1% on Wednesday before closing around 20.4000.

The market generally expects the ECB to lower key interest rates by 25 basis points (bps) after its March policy meeting. ECB President Christine Lagarde will speak on policy prospects and answer questions at a press conference starting at 13:45 GMT after policy statements are issued and revised macroeconomic forecasts. The euro/dollar continued its impressive gains for the third straight day on Wednesday and continued to move higher earlier on Thursday. The pair was last traded at its highest level in four months, slightly above 1.0800. The European Statistics Office will release January retail sales data during the European trading hours.

The pound/dollar fluctuated narrowly around 1.2900 after decisively closing higher on Wednesday. The pair has risen about 2.5% this week.

Earlier Thursday, Australian data showed exports rose 1.3% month-on-month in January, while imports fell 0.3%. The Australian dollar/USD remained in the consolidation phase around 0.6350 after rising more than 1% on Wednesday.

The US dollar/yen turned down after Tuesday's recovery attempt, down 0.6% on Wednesday. The pair stabilized above 149.00 in early trading on Thursday.

Bulle market fundamentals:

Remaining risk sentiment makes it difficult for gold to benefit from selling pressure around the US dollar on Wednesday. Gold continued to consolidate sideways around $2,920 early Thursday after almost no change at the close.

Analysis of major currency trends:

Euro: The intraday bias of the euro/dollar is still on the upward trend, as the current rebound from 1.0176 is still in progress. The next target is to predict the downside of 1.0932 from 1.0358 to 161.8% of 1.0932 from 1.0358, a secondary support level below 1.0721 will make the intraday bias neutral and first consolidate and then rise again.

GBP: The intraday bias of GBP/USD is still on the upward trend as it continues to rise from 1.2099 today. Continuous breakthroughs of 1.3433 to 1.2099, the 61.8% retracement level of 1.2923 will pave the way for a rebound to the 1.3433 high. On the downside, a secondary support level below 1.2803 will turn intraday bias into neutrality and lead to consolidation. But the downside space should be much higher than the 1.2558 support level to bring another rebound.

Yen: The intraday bias of the US dollar/yen remains neutral for the consolidation above 148.08. With the 151.29 resistance level intact, the decline from 158.86 is expected to continue as the third line in the 171.96 high correction mode. The target below 148.08 is 11.8% retracement level 146.32 from 139.57 to 158.86. Continuous breakthroughs will pave the way for a decline to the low of 139.57. However, a breakthrough of 151.29 will redirect biashttps://avatradescn.comUp toward the upward trend, achieving a stronger recovery first.

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