Major currencies still in a bind to start the session

Technical Analysis

Author: Justin Low | usd

The dollar is keeping more mixed on the day so far

For the most part, we are observing little change among major currencies. There are some mild movements but in the context of a change in the technical picture, not much has happened since overnight trading in general.

EUR/USD H1 29-09
EUR/USD is trading within a narrow range today upon breaching above the 100-hour MA (red line) late yesterday. The near-term level is now the spot where buyers are keeping a defense while topside is limited by recent swing region resistance at 1.1680-85.

Those levels are still keeping price action in-check as we get things going on the session.

GBP/USD H1 29-09
Meanwhile, the pound is keeping slightly higher still on Brexit optimism to start the week as buyers are still maintaining near-term control in cable.

The break above the 200-hour MA (blue line) yesterday is still being kept and the near-term bias remains more bullish as such.

However, buyers are struggling a little to keep a firm break above the 61.8 retracement level @ 1.2880 as well as the 1.2900 handle for the time being.

AUD/USD H1 29-09
Elsewhere, AUD/USD is still keeping a bounce above its 100-day MA (red line) as buyers are trying to wrestle back some near-term control in the pair.

The climb today towards 0.7100 sees price action move back above its 100-hour moving average @ 0.7063 and that puts the near-term bias more neutral now.

But in the context of the bigger picture, the bounce in the pair is largely reflective of a similar bounce in the S&P 500 as the index approached its own 100-day MA as well.

Back to trading today, stocks may be reflecting a bit more of a softer mood so far in European trading but the dollar isn't quite moving in tandem with that.

Month-end and quarter-end flows are also playing out so it is tough to try and stick with correlations. As an aside, Citi's month-end model argues for dollar buying alongside rotation into equities so just watch out for that going into tomorrow.

That said, tonight's US presidential debate is also something to be mindful about as it plays a role in impacting positioning flows ahead of the risk event.

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