It’s a rally-and-reverse kind of day for the U.S. dollar!
I’m looking at this potential Fib bounce on EUR/USD in case dollar bulls come charging again.
Before moving on, ICYMI, yesterday’s watchlist checked out NZD/USD’s potential triangle breakdown. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. 10-year bond yield broke October highs, reaching 4.35% and its highest level since November 2007
BOJ core CPI advanced from 3.0% to 3.3% year-over-year in July vs. estimated 2.9% figure
Swiss trade surplus narrowed from 4.82 billion CHF to 3.13 billion CHF vs. projected 4.50 billion CHF
Japan’s Ministry of Finance to raise its assumed long-term interest rate (for debt interest rate payments on annual state budget) to 1.5% based on rising government bond yields
Price Action News
The Greenback had a pretty strong showing leading up to yesterday’s New York session, before the U.S. currency gave up all its gains and then some.
Not even record-high 10-year bond yields were enough to drag U.S. equities south, as investors appear to be looking forward to another strong earnings report from Nvidia. Neither was the surge in yields enough to shore up the dollar, as it extended its losses throughout the Asian session.
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. existing home sales at 2:00 pm GMT
U.S. Richmond manufacturing index at 2:00 pm GMT
Australia’s CB leading index at 2:30 pm GMT
FOMC member Goolsbee’s speech at 6:30 pm GMT
FOMC member Bowman’s speech at 6:32 pm GMT
New Zealand quarterly retail sales at 10:45 pm GMT
Australia’s flash PMI readings at 11:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
EUR/USD: 1-hour
The U.S. dollar has been in selloff mode recently, taking EUR/USD up for a pullback near the area of interest visible on the hourly time frame.
The pair recently fell through support at the 1.0950 minor psychological mark and looks ready to retest this potential resistance zone.
Now this happens to be spanned by the 38.2% to 50% Fibonacci retracement levels and is also near R1 (1.0940) so sellers might be hanging out in this area.
If so, look out for a continuation of the slide back to the swing low at 1.0845 or even S1 (1.0820) and S2 (1.0780).
A couple of FOMC members are scheduled to make testimonies in today’s U.S. session, so hawkish rhetoric might be enough to revive dollar strength. Besides, the recent jump in 10-year Treasury yields might be factored in, especially if we see an extension of these gains.
