A more hawkish than expected ECB meeting and a quite good NFP print last week lay behind us and the fx market is waiting for the next catalyst moving spot rates. Dollar bulls like to see the DXY above the 95.55 level for a comeback of the recent 95.60 / 96.60 range. Nevertheless the Dollar-Index looks battered and trading just at the lower end of the range looks not very encouraging for now.
EURUSD -- 1.1420
The run up in the currency pair stopped last week at the last resistance zone around 1.1482/83 before the 200 dma (1.1672) comes into play. At the currenct spot level there are no real entry levels for delta one trading on a daily base as the pair trades in no man’s land between the support zone around 1.1358 (descending trendline) and 1.1352 (50 ema) and the resistance described. Participants with deeper pockets could try to long the Euro above the smaller support at 1.1383 but I prefer to wait for a deeper correction.
GBPUSD -- 1.3548
Trading Cable can be a pain and once I even heard of a Sterling trading desk (Tier 1) where the traders were given a negativ budget as target. I cannot tell you if this story is fully true but at least the part that Sterling is difficult to trade should it be. Anyway GBP lost some of its shine since the rate hike of the BoE last thursday but is still well supported above the 50 ema (1.3505). I like the pair higher from here for a restest of the 200 dma (1.3708). But of course I have in mind what I just wrote about GBP.
Good luck,
Sebbo