The dollar was battered in trading yesterday, with the selling coming mostly in US trading. It also comes after the ECB but I wouldn’t really say that was much of a trigger, apart from perhaps a strong run higher in the euro currency itself.
For the dollar, it was mostly a delayed reaction to the FOMC meeting as markets had time to digest things. That also saw risk trades rally hard with all three major US indices closing with over 1% gains on the day.
EUR/USD was a strong performer, building on the break above its 100-day moving average and 1.0800 in the day before, rising to above 1.0900 as buyers now target the 1.1000 mark.
Meanwhile, GBP/USD also clinched a breakout above its May highs – also the May highs from last year – as the path opens up towards 1.3000 next. Then, we saw USD/CAD build on the break below key trendline support of 1.3336 this week in a fall to 1.3220 as sellers are hoping to seal a weekly close below the lows from November last year around 1.3225-28.
Looking over to the antipodeans, AUD/USD is now sitting comfortably higher on a break above its April and May highs. It has been an impressive rebound since testing 0.6500 as price action now is freed up towards a potential test of 0.7000 next.
In the commodities space, gold also managed to salvage what could have been an ugly day as the turnaround in US trading saw a hold of its 100-day moving average at around $1,941. There’s still pressure on the key support level for now but buyers are able to breathe a sigh of relief at least, taking advantage of the dollar’s weakness.
I’ll post the individual charts through the session later. But to sum up, the dollar is certainly in a bit of a pickle as space opens up for further weakness – at least according to the charts.