The surprisingly comfortable US PMI report here was a key set off that kicked off a contemporary spherical of promoting within the greenback yesterday. In a time when markets are fearing the Fed being extra aggressive within the tightening cycle, the 2 circumstances for that i.e. increased inflation information and stronger financial information generally, have come up brief and so the greenback is paying the worth.
The dollar was at a checkpoint of types for the reason that finish of final week and whereas there have been some optimistic technical developments on Monday, that’s all just about gone now as value motion reverses and head again within the different route.
EUR/USD is now buying and selling again above its 200-day transferring common (blue line) after the primary try final week didn’t get previous the important thing stage. A agency break above that and a push above 1.0500 will preserve consumers in a great place to chase a transfer in direction of key trendline resistance (white line) subsequent, above the 1.0600 mark.
Meanwhile, GBP/USD has additionally managed to safe a every day break above the 1.2000 mark and that leaves scope for consumers to roam in direction of the 200-day transferring common (blue line) subsequent – now seen at 1.2189. That would be the subsequent essential resistance stage for the pair earlier than the August highs at 1.2276-93 come into play.
With equities additionally pushing increased yesterday in a unhealthy information is sweet information form of temper, the aussie has additionally come again up with AUD/USD securing a return above its 100-day transferring common (crimson line). That is conserving consumers in a good spot as value now runs into one other check of its 61.8 Fib retracement stage at 0.6767 as soon as once more.
To summarise, greenback bulls tried to make a little bit of a comeback however are being thwarted on the checkpoint as financial information fails to validate the current rebound. And so, the technicals are actually pointing to the notion that we would get one other draw back leg within the greenback once more.