From a technical perspective, the bias still seems tilted firmly in favour of bulls and the overnight dip might be categorized as corrective amid overbought conditions. Hence, any further slide will still be seen as a buying opportunity near mid-1.1600s. That said, some follow-through selling has the potential to drag the pair further towards the 1.1600 mark. The mentioned level represents an important resistance breakpoint, marked by the 50% Fibonacci level of the 1.2555-1.0636 downfall, and should now act as a strong base for the pair.
On the flip side, immediate resistance is pegged near the 1.1750 area, above which bulls are likely to make a fresh attempt to reclaim the 1.1800 mark. A subsequent move beyond September 2018 swing highs resistance near the 1.1815-20 region, which coincides with the 61.8% Fibo. level, will be seen as a fresh trigger for bulls and set the stage for additional gains.
Fundamental Overview
|
GMT
|
Event
|
Vol.
|
Actual
|
Consensus
|
Previous
|
|---|---|---|---|---|---|
| WEDNESDAY, JUL 29 | |||||
| 08:30 |
40.010K
|
33.900K
|
9.273K
|
||
| 08:30 |
GBP Consumer Credit
|
£-0.086B
|
£-2.000B
|
£-4.542B
|
|
| 08:30 |
£1.8B
|
£-0.4B
|
£-3.3B
|
||
| 11:00 |
4.1%
|
||||
| 11:30 |
-1.2%
|
||||
| 12:30 |
$-75.26B
|
||||
| 14:00 |
-10.2%
|
-5.1%
|
|||
| 14:00 |
15.0%
|
44.3%
|
|||
| 14:30 |
0.357M
|
4.892M
|
|||
| 18:00 | |||||
Apart from this, a sharp intraday turnaround in the US Treasury bond yields further collaborated towards capping the attempted USD bounce. The pair dipped to the 1.1700 neighbourhood, albeit lacked any strong follow-through selling and managed to regain some traction during the Asian session on Wednesday. Market participants now look forward to the highly-anticipated FOMC decision, scheduled to be announced later during the US session.
The Fed is widely expected to keep its policy measures unchanged at the end of a two-day meeting on Wednesday. Hence, the key focus will be on the accompanying, where the US central bank could provide hints of a potential change in the monetary policy stance at the upcoming meeting in September. A more dovish signal will be enough to exert some additional pressure on the already weaker greenback and pave the way for an extension of the pair's recent strong bullish momentum.
Reprinted from fxstreet.com, the copyright all reserved by the original author.
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