Analysts at Brown Brothers Harriman explained that one of technical factor that emerged last week was the beginning of the correction of the dollar's losses.
"This is most evident in the Dollar Index and its biggest constituent, the euro. The first thing to note is that the Dollar Index and euro have already retraced more than 61.8% of the move following the FOMC meeting (found near 96.10 and $1.1165 respectively.
The overshoot has been minor, meaning that both the Dollar Index and the euro are at potential turning points. However, the technical indicators point to a further dollar recovery.
The next logical assumption is that the dollar is recovering from the sell-off since the ECB meeting on March 10. The Dollar Index met the 38.2% retracement near 96.05.
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The 50% retracement is seen near 96.50, which corresponds to the 20-day moving average (~96.60). The 61.8% retracement is around 97.00, which is where the Dollar Index peaked the day the FOMC statement and dot plots were updated March 16 (~97.05)."
