US Dollar slips after Fed rate hike

27 de jul. de 2023

EURUSD: Holds above crucial support
EUR/USD remains above strong support levels on Wednesday, near the upward trend line from early June and close to the 200-period moving average on the 4-hour chart. However, it is too early to conclude that downward pressure has diminished - the pair needs to overcome the initial resistance level at 1.1150 from Monday. Until then, the bias seems to be reinforced in a broadly constructive outlook. As highlighted in the previous update, only a drop below the mid-July low of 1.0825 would alleviate broader bullish pressures.

GBPUSD: Bullish pressure is still intact
GBP/USD has rebounded from a strong support level around 1.2800, including the uptrend from late June and the mid-June high of 1.2850. Maintaining support is crucial for short-term upward pressure. GBP/USD now needs to surpass the initial resistance at Thursday's high of 1.2965 to eliminate potential price declines.

Any decline below Monday's low of 1.2800 confirms diminishing upward pressure, possibly leading to the late June low of 1.2600. To summarize, the broader trend is still upward, with the potential to rise to 1.4200 in the coming months.

USDJPY: Growing odds of a false bullish candle
USD/JPY has shown a convincing response, dropping below support at 140.75 on Wednesday, increasing the likelihood of a higher mistake last week. Currently, USD/JPY is testing a critical convergence support zone at 139.50-140.00. Any break below could confirm that the strong Friday recovery above the 200-period moving average on the 240-minute chart was false. On the other hand, the resistance at the Friday high of 142.00 remains an important barrier to overcome.