The volatility of USDX trading has significantly decreased, while I will draw attention to the weakness of sellers near the 91.50 mark. Nevertheless, the target of 91.30 is still relevant and will be achieved if there are no new bullish fundamental factors for the USD. I would like to draw your attention to the lack of publications of important macroeconomic reports from the United States. The release of data on changes in the number of construction permits issued, as well as the foundations already laid in the United States, is unlikely to have a strong impact on the USD. But unexpectedly weak data in the report will contribute to the weakening of the index.
The buyers' activity has considerably lowered and, as a consequence, we see the quotes consolidation in the narrow range of 1.1950-1.1990. Until the time of quotes fixation under 1.1950 a bullish scenario remains in priority. That is why I will consider a return of the quotes above 1.2000 as a proof that the bulls will be able to continue the growth towards the upper border of the descending channel and resistance level 1.2100.
Taking into account the low news background, during the European and American trading sessions, the volatility of trading may decrease. Therefore, one should not expect to reach the resistance at 1.2100 today.
Another attempt of the buyers to overcome the resistance at 1.3800 was unsuccessful. Accordingly, we are still observing the formation of a sideways pattern of 1.3670-1.3800. Pay attention to the fact that the pair is still held under the lower boundary of the ascending channel. Therefore, a break of the support at 1.3670 may trigger the development of a more powerful downward wave. Given the moderate weakness of the US dollar, a very strong weakening of GBP is needed for a bearish scenario to develop.
Today the pair may stay in the marked range, as there will be no important releases from the UK.
After the pair's quotes returned to a fairly wide accumulation zone of 108.35–109.30, the activity of sellers significantly decreased. This is quite a natural reaction of the market, because earlier in this price range there was a strong confrontation between buyers and sellers. Active trading in this range is not advisable. Fixing quotes above 109.30 is a bullish signal. Until then, there is a risk of a decline to 107.80.
The above overview is not a direct guide to action, but only a recommendation.
IMPORTANT: Please be informed, that our services are available for Professional Clients only.