The major currencies aren’t seeing any sustained intraweek moves as traders are mostly cautious ahead of the U.S. debt ceiling deadline. Heck, not even some major economic reports are enough to cause significant moves! Sigh. I’m missing volatility almost as much as I miss the summer beaches.
For now the comdolls are losing out to the safe havens especially since reports from the Asian markets aren’t exactly risk appetite-friendly. The European currencies are also trying to make a go against the dollar, but I guess the dollar bears could only do so much when risk aversion is also in play.
Of course, this doesn’t mean that the dollar has no more room to fall, especially if the U.S. policymakers continue to butt heads in the days heading towards the debt ceiling deadline.
GBP/USD: Cautiously Bearish
Fundamentally I’d like to think that the pound is still heading higher, but GBP/USD’s 4-hour chart is saying otherwise. It’s finding a hard time climbing above a previous support near the mid-channel area. Think the 100 SMA would hold as support for this one?
No use fighting a trend! Until we hear progress from the U.S. government officials, we can take advantage of USD/JPY slow but sure downward momentum. Right now USD/JPY is near a falling trend line, Fib, and a 100 SMA. I’ll probably wait for a strong break below 97.00 or a new low before I enter though. What do you think?