The dollar displayed initial uncertainty at the outset of the week. However, recent sessions have seen a revival in its strength, spurred by key technical observations. After approaching crucial technical levels last Friday, the dollar avoided a breakdown, aiding its recovery early this week amid a fluctuating market sentiment.
Picture: EUR/USD price movement as seen on VT Markets trading app.
In the EUR/USD market, Friday’s test of 1.0800 and the 200-day moving average proved to be a critical juncture. With these levels holding firm, the pair now faces the possibility of recording back-to-back daily declines for the first time since mid-April. This could indicate a cautious approach by traders as they anticipate further cues.
As the Reserve Bank of Australia (RBA) held back on new directives, the currency struggled against established resistance levels between 0.6634 and 0.6650. This resistance has started to tip the balance back in favor of the sellers, hinting at a short-term repositioning in the market.
Picture: The downside prevails for GBP/USD. Download the VT Markets trading app.
Turning to the GBP/USD, the pair has decreased by 0.3% and is currently near 1.2470. After a brief rise earlier in the week, resistance at the 50.0 Fibonacci retracement level at 1.2596 has proved formidable, with subsequent declines now taking the pair below both the 100 and 200-hour moving averages. This shift suggests sellers are regaining dominance, especially with the price now below the 1.2500 mark.
The forthcoming U.S. economic reports, including Producer Price Index (PPI) data on Tuesday, followed by Consumer Price Index (CPI) and retail sales figures on Wednesday, will be pivotal. These releases will either confirm or question the validity of the trends observed this week, providing a clearer direction for market movements.
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