Weekly Market Outlook: DXY Weakness Sets Up EUR/USD Bulls

The US Dollar Index (DXY) has broken below the critical 104.00 support level, signaling continued weakness heading into the new trading week.

Key Observations

- DXY dropped 1.2% last week, its biggest weekly decline in 3 months
- EUR/USD reclaimed the 1.0800 handle with strong momentum
- ECB holding rates steady while Fed signals potential cuts

Technical Setup

The daily chart shows a clear break above the descending trendline that capped price since December. Volume confirmation on the breakout adds conviction.

Look for pullbacks to the 1.0780-1.0800 zone for long entries. The next major resistance sits at 1.0950.

Risk Factors

- US NFP data this Friday could reverse the trend
- Geopolitical tensions remain elevated
- Watch for ECB rhetoric shifts