Investors are holding their positions ahead of the Fed's 2-day meeting. The dollar index fluctuates around the 91.80 level at the beginning of the US session. The dollar continues to experience support from the growing yield of US government securities.

The EUR/USD pair continues to trade below the 1.20 mark after a major correction at the end of February. Euro bulls have no reason to defend their positions, the fundamental picture is unfavorable. Technical analysis also does not favor long positions on the euro. Stochastic lines have moved out of the oversold zone, but their movement has become very slow. A reversal is not excluded, which indicates a strengthening of short positions in the short term.

The bearish scenario will play out in full force if the strong support level of 1.1910 is broken. Furthermore, the pair's rate may plunge to the levels of 1.1880, 1.1830 and even move to the territory of the 17th figure.

The development of a bullish movement is also not excluded. This will happen after the buyers overcome a strong resistance level around the 1.1950 mark. This will open the way to values above 1.20.

Among the factors that put pressure on the euro is the fact that the eurozone is once again facing difficulties in the field of vaccination. On Monday, Germany and France joined the countries that suspended the use of the anti-covid drug from AstraZeneca. As of today, some districts in Germany have resumed quarantine measures, and Austria has announced the beginning of the third wave of coronavirus. All this, of course,will affect the behavior of investors in the short term.

The rejection of the AstraZeneca vaccine, which has serious side effects, "will significantly damage public confidence in the AstraZeneca vaccine and even confidence in all vaccines," the analysts wrote.

This will reinforce the view that the euro zone's economic recovery will lag behind other developed countries, including America.

The focus then shiften on to US macroeconomic reports. Retail sales fell 3% in February after rising a month earlier. The indicator was much worse than the expectations of the markets. The drop in this area is likely to be temporary, but it once again points to the fragility of consumer confidence and the importance of stimulus measures.

Weak activity from consumers may put pressure on stock indexes and return demand for protective assets, such as short-term government securities. This should please the buyers of the dollar. Other safe haven currencies, such as the yen and the franc, may also rise against risk-sensitive currencies.

As for the positioning of the Swiss franc against the US dollar, the former is weakening. Since mid-February, the franc has lost 5% of its value against the greenback. This was despite the growing dollar liquidity. It's all about the sale of "long" treasuries and the outflow of funds from the funding currencies. These trends will strengthen with the growth of inflation expectations in the United States.

So, the sale of US government bonds weakens the demand for the Swiss franc, and further growth in inflation will further spur the rise of the USD/CHF pair. The head of the Federal Reserve is monitoring the situation of price growth, he has already made it clear that a rate hike may begin ahead of time. In this scenario, loans will become more expensive, and there will be less dollars in circulation. In other words, this is the path to the growth of the dollar.

The Fed did not plan to tighten policy ahead of time, but the CPI is confusing the cards. At the end of February, the indicator was 1.7%. If inflation exceeds 2% in March, the US central bank will probably use verbal intervention to delay the inevitable rate hike a little. In any case, this will indicate a transition to a new cycle, and the Swiss franc will continue its downward trend.

According to some analysts, the Fed will review the deadline for inflation to reach 2% at the current March meeting. However, it is too early to talk about a change in the course of monetary policy.

Moreover, given the growth in the yield of treasuries, the leadership of the US central bank may go to increase the volume of bond purchases. We are talking about expanding the parameters of monetary stimulus. This is a negative for the dollar. But if you look back a little, you can remember that just recently, the Fed representatives, led by Fed Chairman Jerome Powell, said that they were not concerned about the growth in government bond yields, as it indicates an improvement in the outlook for the economy.

Be that as it may, the importance of the Fed meeting is high. The results of the meeting can set the direction of the dollar's movement for several months ahead.

In addition to the Fed, the Bank of England will also hold a meeting this week. Should the pound be afraid of the central bank's statement? Analysts almost unanimously insist on the preservation of policy parameters by the BoE. Expectations of faster economic growth in the country provoked a sharp increase in the yield of UK government securities. However, the central bank is likely to continue to take a wait-and-see attitude. On Tuesday, BoE Governor Andrew Bailey said the bank would continue its bond purchases in 2021, although "inflation will remain below the 2% target."

However, some cataclysms in the pound should not be expected. Compared to the same euro, the pound's position is more stable. Vaccination in the UK is successful, traders can rely on the rapid weakening of lockdowns and, as a result, a rapid recovery of the economy.

The BoE is scheduled to meet on Thursday. Although there will be no changes in the policy, the comments of the central bank's management may well increase the volatility in the GBP/USD pair.

This currency pair is still dominated by bearish sentiment. There is still strong resistance for the pound at 1.3935. Now traders are focused on the mirror level of 1.3857. If this level is broken down, then the selling sentiment in the GBP/USD pair may increase. Then the path will open to the levels of 1.3800, 1.3735.

Interception of the initiative by buyers is also not excluded. In this case, the target marks will be 1.3930, 1.3990, that is, the 40th figure can again be conquered.