Been watching the forex markets pretty closely this week and there's definitely something shifting with the dollar. DXY dropped about 1.2% last week - biggest move we've seen in a while - and honestly it's catching a lot of traders off guard. The euro's up 1.5%, sterling's pushing 1.8% higher, even the aussie jumped 2.1%. This isn't just random noise either.

What's interesting is the setup behind it. Risk appetite is coming back, central banks are starting to look more aligned on policy, and the technical levels are finally breaking. I'm seeing carry trades activate again, institutions trimming their dollar positions, and the whole narrative around safe-haven demand just evaporating. The USD forecast for near-term looks soft unless something major shifts.

Technically, I'm watching DXY support at 103.50 closely - if that breaks we could see 102.80 next. Meanwhile EUR/USD already cleared 1.0900 and looks strong, though GBP/USD is getting a bit extended. JPY's still caught between intervention concerns and rate differentials.

The real test comes this week with inflation data and central bank chatter. If the Fed signals dovish, this dollar weakness could accelerate. If data comes in hot, we might get a quick reversal. Either way, the USD forecast depends heavily on what Powell says and whether inflation actually cools. Keeping my eyes on those levels and ready to adjust when new data hits.