US DOLLAR TUMBLES OVER IMPROVING RISK ENVIRONMENT
The US dollar index slumped below the 94.00 support level this week as improving investor sentiment towards global growth supported the buying of riskier asset classes. The US dollar also came under pressure as the ten-year US Treasury-yield traded towards levels not seen since 2011, against a backdrop of rising US interest rates and increasing inflationary pressure. Traders looked past trade tensions between the United States and China, as the world’s two largest economies imposed fresh trade tariffs on each other.
The USDJPY is only bullish while trading above the 111.75 level, key resistance is located at the 112.80 and 113.20 levels.
If the USDJPY pair trades below the 111.75 level, key support is found at the 111.10 and 110.40 levels.
Cryptocurrencies remained cautious this week as the upcoming decision by the US Securities Exchange Commission on a potential Bitcoin ETF limited trading gains in the digital currency market. Ethereum settled around the $200.00 resistance level after last weeks strong upside recovery, while Bitcoin traded within a narrow trading range between the $6,000 and $6,500 levels. Litecoin held firm above the $50.00 level after an early week dip-lower, as bulls and bears continued to tussle for control of the seventh largest cryptocurrency by market capitalization.
The BTCUSD pair is bearish while trading below the $6,050 level, further losses towards the $5,700 and $5,100 levels seem possible.
If the BTCUSD pair trades above the $6,050 level, further gains towards the $6,550 and $6,830 resistance levels remains possible.
POUND ROARS HIGHER
The British pound surged higher against the US dollar currency this week, as price moved within touching distance of the 1.3300 resistance level. The British pound gained sharply as the greenback tumbled across the board and the United Kingdom economy posted a series of better than expected economic data points. UK CPI data showed monthly inflation far outpacing market expectation, heightening calls for an upcoming rate hike from the Bank of England. The UK economy also posted solid consumer spending numbers, with UK Retail Sales climbing +0.3% during the month of August, which was far better than most economists expected.
The GBPUSD pair is bullish while trading above the 1.3205 level, key resistance is found at the 1.3300 and 1.3351 levels.
If the GBPUSD pair moves below the 1.3205 level, key support is found at the 1.3170 and 1.3100 levels.
EURO TECHNICAL BREAK
The euro currency finally broke to the upside against the US dollar this week, as buyers pushed through the key 1.1730 technical barrier. The EURUSD pair extended the move higher to the 1.1778 resistance level, with 1.1800 resistance level the next major target for euro bulls. The single currency had spent much of the week stuck in a tight range, with a sharp drop in the value of the US dollar index eventually helping the EURUSD trade to its highest level since July 9th this year.
The EURUSD pair is bullish while trading below the 1.1600 level, key resistance is found at the 1.1800 and 1.1850 levels.
If the EURUSD pair trades below the 1.1600 level, key support is found at the 1.1554 and 1.1480 levels.