On the daily chart below, we can see that the price keeps trending upwards, targeting the top of the range at 1.2444. We have not seen these levels since the famous February blockbuster NFP report.
Ironically, even though the US Dollar acts as a safe haven in times of stress, the banking problems weakened the USD a lot, mostly due to the fast repricing lower in interest rates expectations. The moving averages are now crossed to the upside, although they can be deceiving within a range, but the upward momentum nonetheless is still intact.
What the market will be watching now is if the US economic data keeps coming in strong, in which case we should see the USD favoured again.
On the 4 hour chart below, we can see that the FOMC decision gave the pair a boost and led to a break above the resistance at 1.2265. In the following days though, the price started to fall and even broke below the trendline, which signalled a possible fakeout.
The setup was getting really nice for the sellers, but the buyers invalidated everything as the price jumped back above the 1.2265 resistance again and it’s now targeting a break above the high at 1.2344.
Ironically, this rally came after the hot US PMIs, which is a head-scratcher, but it can also indicate that this is a squeeze on dollar longs as the buying momentum is also waning given the divergence with the MACD.
On the 1 hour chart below, we can see that the price is now trading in a channel-like fashion targeting the high at 1.2344. The sellers may want to wait for the moving averages to cross downwards and even for the price to break back below the 1.2265 level before piling in.
The buyers, on the other hand, will look forward to the break above the high to target the next resistance at 1.2444.
