Federal Open Market Committee minutes send the dollar lower, yet there is reason to believe that this could be fleeting, before pairs reverse in favour of the dollar.
EUR/USD gains after FOMC minutesEUR/USD managed to regain lost ground yesterday, following a dovish set of FOMC minutes which provided a drag upon the dollar across the board. We are looking for a reversal from these areas, given the fact that the recent rally looks like a retracement of the referendum downturn. Thus, while yesterday didn’t help the cause we are still looking for signs of a bearish reversal. Currently EUR/USD is facing trendline resistance, which has the potential to push the pair lower. While a bearish view is in play, it makes sense to await a break and hourly close back below $1.1241 to provide confirmation.
GBP/USD in key resistance zoneGBP/USD continues to gain ground, as yesterday’s dovish minutes provided a boost for the pair. However, GBP/USD currently trades within a very interesting resistance zone, with the double-top neckline at $1.3059 seemingly passed, yet the 10 August peak of $1.3094 yet to come.
This is a key hurdle which must be overcome if the current rally is to extend. As such, while we are seeing the pair rising, it makes sense to await a response to the $1.3094 level first given the weakness we’ve seen earlier in the month.
AUD/USD weakening from Fibonacci resistanceAUD/USD has rallied into the 76.4% resistance once more following a sharp appreciation post-FOMC minutes. Given that this pair has rallied into a major multi-year trendline resistance, we are looking for it to turn lower once more.
As such, as long as we do not break above $0.7749, there is reason to believe we will see the pair turn lower once more today. Support levels of note are $0.7636 and $0.7609.
