Market Analysis – USD Awaits Catalyst – Orbex Forex Trading Blog

USDCHF bounces back

The US dollar clawed back losses after an uptick in July’s PCE. The pair came under pressure at the daily support-turned-resistance of 0.8870 from the mid-July sell-off. A drop below the lower band (0.8760) of a previous consolidation area has shaken off some weak hands. However, a bounce back above 0.8800 suggests that the bulls have not had their last word yet. A close above 0.8870 would signal strong willingness in keeping the dollar’s recovery intact and 0.8790 is a fresh support in case of hesitation.

EURGBP seeks support

The euro dipped after ECB officials acknowledged a slowdown in growth across the bloc. The pair is still in a consolidation pattern above 0.8500 and this suggests that the bulls have not capitulated yet. A break above 0.8610 is an encouraging sign, throwing off more short interests and paving the way for an extension to July’s peak of 0.8700. As the pair looks to hold onto its gains, the demand zone 0.8540-0.8560 is key in maintaining the current momentum to prevent a slip back to 0.8500. Then 0.8590 is the first hurdle to lift.

XAGUSD tests key resistance

Silver steadies as traders await the US job report. The precious metal has recouped most of the losses from the sell-off in late July. The peak of 25.25 is a major ceiling ahead and its breach would force the remaining bears out and signal a bullish continuation in the medium-term. However, a bearish RSI divergence in this significant supply zone could hold the buy side back, at least momentarily as a combination of fresh selling and profit taking could drive the quote lower. 24.00 is the first support should this happen.

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