The Dollar Continues to Strengthen since the Beginning of the Year

<img src="https://fxopen.com/blog/en/content/images/2024/01/eur-usd.jpg" alt="The Dollar Continues to Strengthen since the Beginning of the Year" /><p>The dollar index is hovering at a one-month high against a basket of currencies as remarks from Federal Reserve Chairman Christopher Waller dampened expectations of a March rate cut.</p><p>He said that while the U.S. is &quot;within striking distance&quot; of the Fed&apos;s 2% inflation target, the Fed should not rush to cut its benchmark interest rate until it is clear that lower inflation will be sustainable.</p><p>Market expectations for a rate cut in March fell to 62.2%, down from a forecast of 76.9% in the previous session, according to CME&apos;s FedWatch Tool.</p><figure><img src="https://fxopen.com/blog/en/content/images/2024/01/171–3-.png" alt="The Dollar Continues to Strengthen since the Beginning of the Year" loading="lazy" width="2000" height="1099" srcset="https://fxopen.com/blog/en/content/images/size/w600/2024/01/171–3-.png 600w, https://fxopen.com/blog/en/content/images/size/w1000/2024/01/171–3-.png 1000w, https://fxopen.com/blog/en/content/images/size/w1600/2024/01/171–3-.png 1600w, https://fxopen.com/blog/en/content/images/size/w2400/2024/01/171–3-.png 2400w" sizes="(min-width: 720px) 720px" /></figure><p>The EUR/USD chart today shows that:<br>→ The rate dropped below the important psychological mark of 1.09 euros per dollar. Now (in case of testing) this level can serve as resistance.<br>→ The decline in EUR/USD from the peak at the end of December 2023 has already exceeded 2.3%. Will the trend continue?</p><p>Technical analysis of EUR/USD suggests that the strengthening of the US dollar may slow down, as the price is near important support — namely the lower boundary of the ascending channel that has been in effect since the end of last year (the channel is plotted along the turning points indicated by the arrows). It is possible that we will see a rebound from the lower border and by its nature we will be able to judge what the chances of the bulls are to keep the price within the channel.</p><p>Today at 16:30 GMT+3, US retail sales data will be published, be prepared for spikes in volatility.</p>