August 26, 2021 15:04:18
The majors are more or less confined to recent ranges with broad measures of FX volatility muted. The risk rally is pausing today as the expectation that Chair Powell adopts a more cautious tone tomorrow due to the Delta variant runs its course. So, the bar for a dovish surprise seems higher than compared to a more hawkish jolt. In the medium term, it seems consensus still believes the Fed will normalise policy measures faster than most of its peers. This supports a higher dollar in time.
GBP/USD trending lower
There is no clear catalyst for the pound apart from the broad dollar tone. Selling pressure has emerged today with trendline resistance, the 50-day and 200-day SMAs all converging around 1.38. Continued failure here will see lower prices and a probable test of 1.36, after moving down through the March lows at 1.3660. The cycle trough in July at 1.3571 is major support with the figure below here.
AUD/USD struggles at the half-way point
The aussie has been hit by a plethora of factors including domestic lockdowns, falling iron ore prices and little support from any RBA tightening, which looks some way off. Prices have rebounded on this week’s risk rally but have failed at the 50% retracement level of the July / August move around 0.7266. The descending trendline from the June high acts as next line of resistance at 0.73 with the August top at 0.7426 needing to be taken to regain any upside momentum. Bears have their eyes firmly on the recent low at 0.7105 with 06991 a longer-term target.
Although Moneta Markets aims to ensure that the information/material is accurate, it cannot be held responsible for any omissions/miscalculations or mistakes as it does not warrant the accuracy of such material. Any material and/or content provided herein is intended for educational purposes only and does not constitute investment advice on how clients should trade as it does not take into consideration your personal objectives, financial circumstances or needs. Please seek independent advice before making any trading decisions. Reliance on such material is solely at your own risk and Moneta Markets cannot be held responsible for any losses resulting directly or indirectly from such reliance. Any reference to figures/statistics or numbers refers to the group of companies of Moneta Markets. Please refer to the legeal documents should you require more information.
