It's been an exceptional week for the euro and pound against the dollar

<p>The dollar crumbling across the board has a lot to do with the solid runs higher in both EUR/USD and GBP/USD. But the stronger hawkish bias towards the ECB and BOE are also helping both the euro and pound gather some solid momentum in the latest upturn against the greenback.</p><p>There is a bit of a pause to the upside run today but the charts are the ones to do all the talking so far this week.</p><p>EUR/USD broke above its April to May highs around 1.1075-95 before pushing past its 200-week moving average (blue line) of 1.1181 and is hoping to keep a hold and break above that as well as the 1.1200 level.</p><p>Buyers are definitely looking extremely poised and keeping the momentum above 1.1200 could see the dollar downside leg extend further into next week.</p><p>Meanwhile, GBP/USD has enjoyed a solid run higher as it takes out its own 200-week moving average (blue line) of 1.2882 as well as the 1.3000 mark this week. The pair is on course for its biggest weekly gain so far this year as price continues to hold above 1.3100 for now.</p><p>There is very much little resistance stopping the pair from a further upside run here, with the next key spot perhaps being the big figure levels around 1.3200 and 1.3400.</p><p>Going back to the central bank argument, the fact that US inflation numbers have come in softer this week has helped to increase odds of the Fed moving to the sidelines in Q3. As for the ECB, they will definitely hike in July and may do so again in September. Elsewhere, the BOE has their hands tied amid soaring price pressures in the UK as markets have already pinned them for over 6% rates.</p><p>The divergence in the hawkish bias among the central banks are also a major contributing factor to each currency's sentiment. But amid the above developments, I'd be careful of the pound the most for reasons I highlighted <a href="https://www.forexlive.com/news/gbpusd-looks-to-solidify-breakout-move-on-the-week-20230713/" target="_blank" rel="follow">here</a>.</p>

This article was written by Justin Low at www.forexlive.com.