Daily thread to exchange ideas and to share your thoughts
It is a bit of a quieter start to the day with major currencies little changed in general, although the yen remains mildly weaker after slipping in trading yesterday as well.
AUD/JPY is up to test the 77.00 level and that is hinting at a potential for a more positive risk bias should buyers firmly breach that and target the August highs @ 78.36-46.
A key story in the major currencies space is the breakout in EUR/USD above 1.2000, as that now opens up a new range to play with for the pair moving forward.
I reckon this allows buyers to gradually start testing the boundaries and look towards 1.2500, although it is quite plausible that we may see a period of "consolidation" between 1.2000 and 1.2500 going into Q1 2021.
Any upside momentum moving too far, too fast will risk incurring the wrath of ECB verbal intervention and any major dips are likely to be bought considering the dollar backdrop amid the transitional risk narrative in the coming months.
GBP/USD also managed to break above 1.3400 on the back of dollar weakness but the 1 September high @ 1.3483 remains a key target to watch, with Brexit developments still playing out in the background this week.
Elsewhere, gold is back above $1,800 but price action is still trading in between its key hourly moving averages for now. So, to say that the flush is over may be a bit premature but we'll see if buyers have the appetite to start running again after last month's drop.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
