The cable could retest the 1.1800 figure if the dollar attracts renewed demand in August
The USD index rose the most in 12 days to exceed the 107.00 figure on Tuesday. The greenback thus turned positive on the weekly charts, albeit struggles to extend the ascent today as traders turned more cautious ahead of the Fed’s verdict. The Fed may frame its rate hike in hawkish terms, boosting the US currency across the board. In this scenario, the index could get back above the 107.60 zone that represents the intermediate barrier on the way towards the 108.00 level last seen ten days ago. The index was last seen changing hands just below 107.00, down 0.21% on the day. Should the corrective pressure intensify aby time soon, the dollar may target the 106.70 zone. EURUSD licks wounds after yesterday’s plunge towards the 1.0100 mark which helped cap the descent. The pair bounced back to the 1.0560 region earlier in the day, but the recovery momentum looks too modest to bet on further gains, especially as traders await the Fed’s decision that will set the tone for the shared currency.
The cable briefly rallied to two-week highs just below the 1.2100 mark on Tuesday, but failed to preserve gains and fell into negative territory for the first time in four days. The pair finished around 1.2030, albeit off intraday lows registered in the 1.1963 area. Today, the pound regained the upside momentum to gain 0.39% in early European hours, thus retargeting 1.2100 for the time being. However, the bullish potential remains limited ahead of the Fed decision as the dollar could regain the ascent across the market later today. On the four-hour charts, the technical picture has improved since yesterday, albeit the elevated volatility persists, suggesting the prices could face another barrier in the near term. On the weekly timeframes, the prices bounced marginally from long-term lows seen this month around 1.1760. However, the 1.1800 figure could be challenged if the dollar attracts renewed demand in August.
After two days of gains, USDJPY came under some selling pressure on Wednesday. The pair slipped back below the 137.00 figure seen earlier in the day. The dollar has settled around 136.70 since then, losing 0.16% on the day. On the upside, a decisive break above 137.00 would pave the way towards the 137.40 intermediate barrier on the way towards the 138.00 mark. Meanwhile, failure to hold above 135.50 could send the greenback to fresh local lows below 135.00, with the key support arriving at 134.30. On the shorter-term timeframes, the bearish bias looks too modest to bet on solid losses in the near term, with the 137.00 figure remaining in the market focus at this stage. In a wider picture, the prices are holding just marginally below 24-year highs registered around 139.40 earlier in the month. As such, USD bulls could retarget the 140.00 figure after some hesitation at lower levels.
USDCAD briefly fell to mid-June lows around 1.2816 on Tuesday before bouncing back into positive territory. However, the pair failed to retest the 20-DMA that capped bullish attempts at the start of the week. A decisive break above the moving average, today at 1.2940, is critical at this stage as the upside potential remains limited while below this level. USDCAD was last seen changing hands around 1.2850, down 0.23% on the day. Failure to hold above this intermediate barrier would shift the market focus back towards the mentioned multi-week low. On the hourly timeframes, the pair is back below the key moving averages while the RSI looks directionless in neutral territory, suggesting the prices could hesitate for the some around the current levels before deciding on the further direction. In general, the path of least resistance remains to the downside for the time being.