Forex News
- GBP/USD trades just short of 1.3550, its strongest level since early May.
- UK unemployment holds at 4.9% against 4.8% expected, employment growth halved.
- September Fed hike odds near 31%, down from above 82% in late July.
The British Pound trades just short of 1.3550 against the Dollar on Tuesday, holding inside Monday's range after a peak short of 1.3600 carried it to its strongest level since early May. That leaves close to 300 pips of recovery from the base just short of 1.3300 built in the first week of August.
The advance has taken the rate back above both major moving averages and pushed the shorter one above the longer for the first time since spring, which is a change of structure rather than a bounce. What it has not involved is any material contribution from Britain. Tuesday's labour market release was the first red-band domestic event in three weeks, and the currency answered it with a 35-pip range and a small loss.
The jobs report cooled in the direction that counts
Regular pay growth, the series the Monetary Policy Committee (MPC) treats as the cleanest read on domestically generated inflation, accelerated to 3.5% in the three months to June from 3.4%, a tenth above consensus. Total pay including bonuses eased to 4.1% from 4.4%. Pay at that pace still sits above the 3.3% the committee pencilled in for the fourth quarter back in February, so on price the release handed the hawks a marginal win.
On quantity the same release handed them nothing at all, with employment growth over those three months nearly halving to 83K from 147K and the unemployment rate holding at 4.9% where a decline to 4.8% was expected. Vacancies slipped to 707K on the May to July estimate, the weakest reading outside the pandemic since late 2014. July's claimant count fell 11K against an expected rise above 11K, the single line in the release that argues the other way.
The rally carries an American passport
Almost the entire August advance belongs to the other side of the quote, where futures now price a September Federal Reserve increase near 31%, down from above 82% in the days after the July 29 decision, a collapse delivered by three consecutive American releases: payrolls contracting 23K, July Consumer Price Index (CPI) at 3.4% YoY with core at 2.5%, and retail sales falling 0.6%.
Sterling's own rate story has barely shifted across the same three weeks, which is what makes the attribution awkward. Swap pricing puts a hold at the September 17 MPC decision near 72%, with roughly 7 basis points of tightening in that meeting and about 30 basis points by year-end.
That curve was built on the energy shock rather than on anything the domestic data has delivered, and Tuesday's numbers gave it no fresh support. The Pound is not being bought. The Dollar is being sold, and the autumn Budget in October still sits beyond the horizon of every forecast currently in the price. Renewed tension around the Strait of Hormuz put a modest bid back under the Dollar on Tuesday, which accounts for most of the session's small decline.
Wednesday hands the Pound its first domestic test
July inflation lands at 06:00 GMT on Wednesday, August 19, with consensus at 2.9% YoY on the headline against 2.6% in June, and 0.3% MoM against 0.1%. Core is forecast a tenth lower at 2.5%. The shape of that combination matters more than either number, because a headline pushed up by energy while core drifts down is the easiest hold the September meeting could ask for.
Services inflation ran at 3.6% in June and remains the component the committee actually reads, so the reaction function sits well below the headline. The rest of the British calendar runs the same way. Producer prices arrive alongside the inflation release, consumer confidence is forecast to slip to -18 on Thursday, and Friday brings July retail sales expected at -0.5% MoM after a 1% gain, with all three preliminary August Purchasing Managers Index (PMI) readings forecast lower.
Wednesday's 18:00 GMT release of the Federal Open Market Committee (FOMC) minutes is the other half of the equation, and it covers a meeting held three weeks before every print that repriced September. Those minutes carry a record of an argument rather than a forecast, and the Dollar will trade the conditions attached to that argument rather than the vote itself.
Levels to watch
Resistance: Monday's peak short of 1.3600 is the line that matters, and a daily close above it opens the early-May high near 1.3650 with little standing in between. The 1.3550 shelf caps in the interim.
Support: The 1.3500 handle contained Tuesday's low and marks the first shelf. Beneath it, both moving averages now sit stacked in a band between 1.3400 and 1.3450, which is where the August trend gets its first genuine test.
Bias: Bullish. The moving-average band has flipped to support and price holds a clear cent above it, so pullbacks into 1.3450 are for buying rather than fading. The caveat is momentum, with the daily Stochastic Relative Strength Index (Stoch RSI) near 87 and a domestic calendar heavy enough to break the trend. A daily close beneath 1.3400 invalidates.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- NZD/USD hovers near the 0.5870 zone, little changed on the day.
- A firm US Dollar and a risk-off tilt keep the Kiwi on the defensive.
- FOMC Minutes and the Asia-Pacific data releases are the next cues.
NZD/USD hovers around the 0.5870 zone at the time of writing on Tuesday, marginally lower on the day. The pair is treading water as a firm US Dollar (USD) and a cautious market mood keep the New Zealand Dollar (NZD) on the back foot.
The Greenback has kept a mild safe-haven bid as tensions around the Strait of Hormuz stay in focus, with Iran insisting the waterway remains shut and US President Donald Trump saying no talks with Tehran are scheduled. The risk-off tilt has weighed on commodity-linked and higher-beta currencies, and the growth-sensitive Kiwi has felt the drag, with Silver and Gold both selling off sharply in the session.
With little on the domestic calendar, the New Zealand Dollar is taking its cue from broader sentiment and the China-Australia complex. Traders now look ahead to a busy Asia-Pacific session on Wednesday, where Australian employment data and the People's Bank of China (PBoC) rate decision could set the tone for the Antipodean currencies.
Before that, the Federal Reserve (Fed) publishes the Minutes of its latest policy meeting during the North American session, which markets will scan for any fresh signal on the rate path. A more hawkish read would add to the Dollar's edge and could keep NZD/USD capped.
Technical Analysis:
In the four-hour chart, NZD/USD trades at 0.5872, keeping a mildly bearish near-term tone as it holds below the 20-period simple moving average (SMA) at 0.5887 and a tight band of nearby horizontal caps. The pair still sits above the 100-period SMA at 0.5860, which offers underlying trend support, but the Relative Strength Index (14) around 44 suggests lacklustre momentum and hints that rallies could remain constrained while these overhead levels weigh on price action.
On the topside, initial resistance is seen at 0.5873, with further barriers clustered at 0.5878 and 0.5882, followed by 0.5886 and the 20-period SMA at 0.5887; a sustained break above this zone would be needed to ease the current downside bias and open the way toward 0.5965. On the downside, immediate support aligns with the 100-period SMA at 0.5860, and a decisive move below this floor would reinforce the bearish setup and expose deeper losses in the coming sessions.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The US President Donald Trump posted on his social network that “there are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran. The Naval Blockade remains in full force and effect. The Hormuz Strait is open and operating. All water mines have been removed or detonated.”
In the meantime, Politico reported that the Trump administration is intensifying its economic pressure on Iran.
Meanwhile, Al Jazeera reported that a US official said that there is no contradiction in the White House statements regarding negotiations with Tehran, saying that positive discussions took place with Iran. However, Trump decided to wait until Iran “is ready to make a deal.”
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.09% | 0.11% | 0.15% | 0.28% | 0.44% | 0.19% | |
| EUR | -0.06% | 0.04% | 0.07% | 0.10% | 0.23% | 0.41% | 0.14% | |
| GBP | -0.09% | -0.04% | 0.02% | 0.07% | 0.19% | 0.39% | 0.11% | |
| JPY | -0.11% | -0.07% | -0.02% | 0.04% | 0.17% | 0.34% | 0.07% | |
| CAD | -0.15% | -0.10% | -0.07% | -0.04% | 0.12% | 0.31% | 0.04% | |
| AUD | -0.28% | -0.23% | -0.19% | -0.17% | -0.12% | 0.18% | -0.09% | |
| NZD | -0.44% | -0.41% | -0.39% | -0.34% | -0.31% | -0.18% | -0.26% | |
| CHF | -0.19% | -0.14% | -0.11% | -0.07% | -0.04% | 0.09% | 0.26% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- USD/MXN rises as Iran tensions support cautious Dollar demand.
- Weak US housing data was ignored amid escalating Middle East headlines.
- Banxico minutes and Retail Sales may guide the Peso direction.
The Mexican Peso loses some ground on Tuesday, depreciating by about 0.16% against the US Dollar as investors await the release of the Federal Reserve’s last meeting minutes, with a resolution of the US-Iran conflict remaining unlikely. The USD/MXN trades at 17.06, after bouncing off daily lows of 17.02.
USD/MXN climbs as traders eye Fed minutes, Banxico minutes and USMCA risks.
The US-Iran conflict is grabbing the headlines. Recently, CNN, citing a US official, said that Trump told top administration envoys to halt their conversations with Iran. In addition, Trump said that the US Navy blockade remains in full force and effect, while US data was mixed, with US Housing Starts coming in below estimates due to higher mortgage rates and elevated prices.
July Housing Starts in the US declined 12.4% month-over-month, from 1.415 million in June to 1.239 million. Industrial Production for the same period ticked a tenth below estimates and the previous month's reading, though the data was largely ignored amid rising tensions in the Middle East.
The Greenback has risen during the day, up sone 0.07% according to the US Dollar Index (DXY). The DXY, which tracks the buck’s performance against a basket of six currencies, is at 99.65, near familiar levels.
In Mexico, the economic docket remains absent, with traders eyeing the release of the Bank of Mexico (Banxico) meeting minutes on Thursday, followed by Retail Sales on Friday, August 21.
Monex Director of Economic Analysis Janeth Quiroz said that, alongside geopolitics, “the Peso is affected by uncertainty about the revision of the USMCA trade agreement.”
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 17.0610, extending its decline beneath the cluster of longer-term simple moving averages (SMA) and preserving a bearish near-term bias. The latest reading of the Moving Average Triple (50, 100, 200, simple) at 17.3607 sits well above spot, hinting that the broader trend tone remains heavy while price stays capped below this grouped average. Momentum has stabilized, with the Relative Strength Index (14) lifting to 33.19 from oversold territory, yet the indicator still leans to the downside and only suggests that selling pressure may be moderating rather than reversing.
On the topside, initial resistance is located at the grouped longer-term SMA cluster near 17.36, which is reinforced by the descending trend-line originating from 18.1651 and, higher up, by the broader downtrend line drawn from 21.0808. As long as USD/MXN holds below these structural barriers, downside risk dominates, and any corrective bounce is likely to struggle before a sustained recovery can develop.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CNH has been trading quietly, with intraday ranges clustered around current levels. Their 24-hour view suggests the Dollar is likely to stay confined within a narrow band, reflecting the lack of fresh directional clues from recent price action.
Dollar seen confined in tight range
"24-HOUR VIEW: Last Friday, USD traded in a quiet manner and closed marginally lower by 0.01% at 6.7441. When it was at 6.7430 yesterday, we stated that “the price action provides no fresh clues,” and we were of the view that USD “could trade between 6.7370 and 6.7470.” USD then traded within a tight range of 6.7377/6.7438, closing marginally lower by 0.01% at 6.7433. We are unable to derive much from the quiet price action. Today, USD could trade between 6.7390 and 6.7470."
"1-3 WEEKS VIEW: We have held the same view since early this month (03 Aug, spot at 6.7490), when we highlighted that USD “could continue to edge lower toward 6.7300.” Although USD eked out a fresh low of 6.7377 yesterday, there has been no clear increase in downward momentum. That said, there is still a chance for USD to edge lower toward 6.7300. Overall, only a breach of 6.7530 (no change in ‘strong resistance’ level) would indicate that the mild downward pressure has eased."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities turns bearish on the Korean Won, arguing USD/KRW is likely to find support around 1,400 as prior KRW strength fades. They have entered short KRW positions versus both the Dollar and Japanese Yen via NDFs, citing stretched valuation, waning momentum and negative correlation to AI equities, while flagging unhedged foreign inflows as the key upside risk to KRW.
KRW seen rich, momentum fading
"We turn bearish KRW as USD/KRW likely finds support at 1400."
"Bullish KRW momentum is waning, valuation and negative FX correlation to AI should allow KRW to retrace some of its recent gains."
"With bullish KRW momentum finally starting to wane and AI equity sentiment stabilizing after Q2 US earnings, we entered a short KRW trade vs the USD and JPY via NDF in our model portfolio."
"KRW is broadly rich vs global currencies including the USD and JPY after the recent rally but maintains negative correlation with the KOSPI."
"The risk to the trade is foreign inflows to Korea equities without FX hedging and Korean corporate repatriation cause KRW to outperform both the USD and JPY over the next three months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CHF rebounds from flag support as buyers defend structure.
- RSI climbs above neutral, supporting near-term upside momentum.
- Break above 0.8135 targets the flag top and 0.8200.
The USD/CHF pair recovers some ground on Tuesday after testing the 50-day Simple Moving Average (SMA) of 0.7866 along with the bottom trendline of the ‘bearish flag’, which so far contained price action amid the lack of conviction of buyers and sellers, regarding the trend’s direction. The pair trades at 0.8127, near the day's highs, up 0.82%.
USD/CHF Price Forecast: Technical Outlook
Per market structure, USD/CHF is neutral to upward-biased, with momentum favoring buyers, as depicted by the Relative Strength Index (RSI), which is above its 50 neutral level and trending higher.
For a bullish continuation, the USD/CHF must surpass August’s 17 high of 0.8135. Once cleared, it opens the path to challenge the top trendline of the ‘bearish flag'. A breach of the latter will negate the ‘bearish’ chart pattern and pave the way towards 0.8200, followed by the yearly high of 0.8207.
On the downside, if USD/CHF fails to clear 0.8135 and finishes the session below 0.8100, this could exacerbate a move to the 50-day SMA at 0.8084. A move beneath clears the path to the July 30 swing low of 0.8049, ahead of 0.8000.
USD/CHF Price Chart – Daily
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
(This story was corrected on August 18 at 20:11 GMT to say that “The pair trades at 0.8127, near the day's highs, up 0.82%”, not at 0.7960)
Here is what you need to know on Wednesday, August 19:
The US Dollar Index (DXY) held a firm tone near the 99.60s on Tuesday, keeping a mild safe-haven bid as tensions around the Strait of Hormuz stayed front and center. Gold and Oil both sold off, and most major currencies drifted lower against the Greenback. Attention now turns to a busy Wednesday, led by United Kingdom (UK) inflation, a raft of Eurozone data and the Federal Open Market Committee (FOMC) Minutes.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.01% | 0.05% | 0.10% | 0.14% | 0.23% | 0.46% | 0.18% | |
| EUR | -0.01% | 0.04% | 0.09% | 0.12% | 0.23% | 0.43% | 0.18% | |
| GBP | -0.05% | -0.04% | 0.04% | 0.09% | 0.21% | 0.41% | 0.12% | |
| JPY | -0.10% | -0.09% | -0.04% | 0.05% | 0.14% | 0.36% | 0.08% | |
| CAD | -0.14% | -0.12% | -0.09% | -0.05% | 0.09% | 0.32% | 0.03% | |
| AUD | -0.23% | -0.23% | -0.21% | -0.14% | -0.09% | 0.21% | -0.04% | |
| NZD | -0.46% | -0.43% | -0.41% | -0.36% | -0.32% | -0.21% | -0.28% | |
| CHF | -0.18% | -0.18% | -0.12% | -0.08% | -0.03% | 0.04% | 0.28% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Iran's top negotiator repeated that the Strait of Hormuz will stay closed until Washington meets the conditions of the now-expired interim deal, while US President Donald Trump insisted in a social media post that the waterway is open and operating and that no talks with Tehran are scheduled. A vessel was reportedly struck by an unknown projectile in the Strait earlier in the day, keeping a geopolitical premium under the currency.
EUR/USD traded on the soft side, holding a narrow range around the 1.1580 zone as the US Dollar kept the upper hand. The pair now looks to a busy European morning come Wednesday, with Eurozone final Harmonized Index of Consumer Prices (HICP) figures for July and a scheduled speech from European Central Bank (ECB) President Christine Lagarde.
GBP/USD edged lower, treading water around the mid-1.3500s ahead of the session's marquee release. The UK Consumer Price Index (CPI) for July lands early Wednesday, with the headline annual rate expected to tick higher. A hot print would revive bets on Bank of England (BoE) rate hikes and could give the Pound a lift, while a soft one would leave Sterling exposed.
USD/JPY firmed with the Dollar's safe-haven bid favoring the Greenback over the Japanese Yen and nudging the pair toward the 159.60 zone, within reach of the 160.00 handle. Japan's July trade figures are due late in the day.
AUD/USD was among the weaker majors, sliding toward the 0.7080 zone as the risk-off tilt and a firm Dollar took their toll. The Aussie faces a packed Asia-Pacific session on Wednesday, headlined by Australian employment data, alongside Consumer Inflation Expectations and the People's Bank of China (PBoC) rate decision.
Gold retreated sharply, pulling back over 1% toward the $4,350 zone despite the risk backdrop as a firmer Dollar and profit-taking weighed on the metal.
West Texas Intermediate (WTI) Crude Oil remained on the front foot but eased off the early session highs toward the $84.00 area as traders weighed conflicting signals over whether the waterway is actually passable.
Later in the North American session, the Federal Reserve (Fed) releases the Minutes of its latest policy meeting, which traders will comb for any fresh steer on the rate path.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD rebounded after a sharper-than-expected drop to 1.2752, easing immediate downside pressure and pointing to intraday consolidation between 1.2760 and 1.2795. However, the 1–3 week view still sees the risk for the US Dollar (USD) on the downside, with scope for a move toward 1.2740 while resistance is capped near 1.2810.
Dollar seen consolidating before next leg
"24-HOUR VIEW: USD fell to a low of 1.2775 last Friday. When it was at 1.2790 in the early Asian session yesterday, we highlighted the following: “The slight increase in downward momentum is insufficient to indicate a continued decline. That said, there is a chance for USD to test 1.2775 again. The next support at 1.2765 is unlikely to come into view.” While our view that USD would decline was correct, we did not expect the sharp drop to a low of 1.2752. USD rebounded from the low to close 0.16% lower at 1.2778. The immediate downward pressure has eased with the rebound, and instead of continuing to decline today, USD is more likely to consolidate within a range of 1.2760/1.2795."
"1-3 WEEKS VIEW: We have maintained the view that “the risk for USD is on the downside” since early this month. In our most recent narrative from last Tuesday (11 Aug, spot at 1.2805), we highlighted that “while the price action continues to suggest downside risk, USD must break clearly below 1.2765 before a move to 1.2740 can be expected.” Yesterday, USD broke below 1.2765, dropping to a low of 1.2752 before rebounding to close at 1.2778 (-0.16%). While we would have preferred a close below 1.2765, the price action suggests that USD could decline toward 1.2740. The downside risk will remain intact as long as 1.2810 (‘strong resistance’ level was at 1.2840 yesterday) is not breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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