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Bend but don't break. The dollar continues to hold its ground after running into a test near key technical levels in trading yesterday. Meanwhile, risk buyers saw the latest round of vaccine optimism fade rather quickly with US stocks slumping towards the close.
That is keeping things more guarded and cautious as we look towards European trading today, with major currencies little changed for the most part.
EUR/USD backed away after nearing 1.1900 again and has now moved back to test its key hourly moving averages with price leaning on the 200-hour moving average (now @ 1.1832) earlier today with gains limited by the 100-hour moving average @ 1.1852.
The drop in GBP/USD from 1.3300 sees it run towards a test of its 100-hour moving average @ 1.3225 but buyers are still keeping near-term control for the time being.
USD/CAD sellers tried for a break below its 200-hour moving average and 12 November low @ 1.3058 but the push ended briefly as price action reversed higher back to the range in between its key hourly moving averages of 1.3074-98 currently.
Meanwhile, AUD/USD is once again keeping around its key hourly moving averages @ 0.7285-96 as buyers and sellers duke it out for near-term control as resistance from last week's high at 0.7340 remains intact in trading this week.
In the commodities space, gold is gradually softening as sellers keep near-term control on a push towards the key support region around $1,855-63 with the late September lows around $1,848 an area to watch in case of a break to the downside.
Another flush in gold would arguably be a great buying opportunity in the long-run, especially if we get one closer to the 200-day moving average just under $1,800 again.
To sum up the above, it looks like the dollar was pushed near the brink but held on and traders are now caught in a near-term battle to decide the next direction again.
The S&P 500 also fell below 3,600 and the 2 September high of 3,588 so that is now keeping sellers in the game as buyers lose grip of the upside momentum.
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