US Dollar started the first trading day of the year on a bearish note and plunged to below 89.50 during the European session. During December, major currencies remained stronger than the US dollar throughout the month and the dollar dropped more than 6% in 2020. The recent sharp sell-off in the USD fuelled by massive fiscal and monetary policy support, and progress in developing vaccines.
USD Fundamental outlook
For this week, the traders and investors will also pay attention to the important data for USD this week, U.S. Federal Reserve's minutes of the latest meeting on Wednesday and U.S. unemployment report for December is due Friday. On the other hand, the other key event for the US dollar this week, Tuesday’s runoff elections in Georgia that could determine which party controls the U.S. Senate.
USD Technical outlook
While considering the sell-off, the Dollar index trading near the critical demand zone on the monthly time frame. On a daily time frame, the overall movement remained bullish for the USD. In the short term if the price breaks below 89.30 which would open doors towards 89 and below that 88.60 is next. On the upper side, the first immediate resistance can be found in 90 and then 90.40.