The highs this week were seen near 1.2500 and that is just under the 100-day moving average (red line) at 1.2509 currently. But that is enough for sellers to keep their composure after having endured a poor showing on Tuesday after the US CPI data. And now, we're seeing price action even fall back below the 200-day moving average (blue line) of 1.2440.
That sees sellers resume back a softer bias in the pair but just bear in mind that we also do have the 100-week moving average at 1.2398 to contest with on the week.
In any case, the price action yesterday and so far today has been quite a blow to buyers. That especially if you couple it with other dollar pairs such as AUD/USD seen here. It looked like the dollar might have been susceptible to another leg lower but now traders are not really following through on that after the Tuesday action.
The drop from 1.2500 to here is still some ways to go in erasing the gains from two days ago but it does put a dent in confidence of there being any strong breakdown in the greenback, at least for now.
It looks like dollar traders are definitely having some things to consider, as mentioned here yesterday.
As for the pound, the softer-than-expected UK inflation report yesterday will help the BOE breathe easier and quell speculation on more rate hikes for the time being. But we'll have to see how the data trends further in the months ahead.