The U.S. Dollar Bounces To the 93.00 Handle

The overall weakness of the U.S. Dollar is pushing up the GBP/USD currency pair.

FOREX 8

The US Dollar was bullish against all of its major currency pairs on Wednesday as a result of the US Dollar Currency Index rising back up to its 93.00 handle. On the U.S. economic data front, the Mortgage Bankers Association's Mortgage Applications decreased 3.3% for the week ending August 14th, from +6.8% in the prior week. The Federal Open Market Committee released its July 28th-29th Meeting Minutes which stated that U.S. central bankers have decided to hold off on any decisions regarding the federal funds rate as a result of fundamental changes in the economy as they related to the Fed's duel mandate of maximum employment and price-stability objectives. 

On Thursday, Initial Jobless Claims for the week ending August 15th are expected to decline to 920K, from 963K in the previous week. Continuing Claims for the week ending August 8th are expected to fall to 15,000K, from 15,486K in the week before. Finally, the Leading Index for July is anticipated to rise 1.1% on month, compared to +2.0% in June.      

The Euro was bearish against most of its major pairs with the exception of the CHF and GBP. In Europe, the U.K. Office for National Statistics has released July CPI at +1.0% (vs +0.6% on year expected). The European Commission has posted final readings of July CPI at +0.4% on year, as expected.

The Australian dollar was bearish against most of its major pairs with the exception of the CHF and GBP.


The GBP/USD pulled back roughly 48 pips on Wednesday after the US Dollar Currency Index bounced. The currency pair is managing to hold above the upper trendline of an ascending wedge pattern that began to form in mid-March. The GBP/USD will likely chop around and use the upper trendline as support before advancing the retest the 1.3270 resistance level. If the pair can break above the 1.3270 level, it will likely continue upward to retest its 2019 high of 1.3515. If the pair falls below the upper trendline, it will probably fall back to the 1.2815 support. However, the current economic situation in the U.S. is continuing to weaken the US Dollar, which in turn will likely hold up the currency pair.   



Source: GAIN Capital, TradingView

More from Forex

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.