The two charts I'm watching closely in gauging dollar sentiment right now are EUR/USD and GBP/USD. So, let's dive straight into it.EUR/USD is holding
The two charts I’m watching closely in gauging dollar sentiment right now are EUR/USD and GBP/USD. So, let’s dive straight into it.
EUR/USD is holding close to 1.0900 at the moment, following a rebound off the 1.0800 mark in trading yesterday as the dollar slumped. The pair is still facing short-term resistance around 1.0920-30 for now but key resistance lies closer towards the 1.1000 mark.
If we do see a run up towards the latter, that will present a serious threat to dollar sentiment and a break above that should lead to broader downside momentum in the greenback next.
Meanwhile, GBP/USD has been keeping somewhat resilient as the pound also refuses to throw in the towel despite the BOE continuing to stay under pressure. High inflation continues to result in markets thinking the central bank will have to chase higher rates, so we’ll see if policymakers will follow through on that.
The pair pushing up to 1.2420 levels again today with the December and January highs at 1.2443-48 set to provide some key resistance before the 1.2500 mark (psychological point and offers lined up) comes into play.
The pair has been caught around 1.1800 to 1.2400 mostly in recent months, so a firm break above the levels mentioned will definitely be a big momentum shift for the pair. In turn, that could set off further dollar weakness elsewhere if paired with a break higher in the euro as noted in this post.
Elsewhere, USD/CAD is also tracking near the lows for the day at 1.3425 currently after the break below its 100-day moving average yesterday on a gap lower. The loonie is underpinned by higher oil prices and the pair looks poised for a test of 1.3400 at least now.
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