On the balance of things, the dollar suffered in trading last week. However, the Friday turnaround was a notable one - not just because of how the dollar recovered but also because of what that meant for the technicals. In particular, against the euro and pound.
EUR/USD had looked like it would sustain a break above 1.1000 and push for fresh highs in over 12 months. But that breakout was pulled back towards the end of the week, even if buyers may still be holding on to some bullish momentum.
There is still the break above the 100-week moving average (red line) and the 50.0 Fib retracement level at 1.0942, but failure to keep a weekly close above 1.1000 - marginally - as well as the 2 February high at 1.1032 does make a case for sellers to try and stay in the game.
That is one big level that held on the weekly chart for the greenback.
The other key chart is GBP/USD, which showed that the dollar held the line at 1.2500 on a weekly basis. In fact, the weekly close even failed to clear resistance from the December highs at 1.2443-46.
As such, that is still one major factor that GBP/USD sellers can work with to state their case in searching for a downside push this week.
If you couple this with the EUR/USD predicament above, this now makes it two big levels that the dollar has held and rather importantly so.
While there is still some momentum there for dollar bears, the fact that the key levels above are holding is a sign that the next downside leg or broad weakness in the dollar isn't here yet.
I don't typically like to look at the pure dollar index chart but in this instance, it does help to corroborate with the story.
The weekly chart shows that the dollar was pushed to the limit at the 30 May and 2 February lows in trading last week, but it held towards the closing stages. And now, the chart certainly looks like it could be a hold in which dollar bulls can work with to try and reverse back the momentum.
Looking at the week ahead, we aren't going to be so data-heavy as what we got last week but this will be the final few days before the FOMC blackout period. As such, be mindful of Fed speakers as that could shake things up before we get to the May meeting.
