The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
Market updates on August 22
- EUR/USD was supported by better-than-expected PMIs for the Eurozone. The pair has been testing the resistance at 1.1106. If this level is broken, we will focus on the next resistance at 1.1114. Next, the bullish pressure may be limited by the 1.1136 level. It is recommended to pay attention to the updates on the situation in Italy, as the political uncertainties there keep being strong. Today the Italian President Sergio Mattarella will meet with the parties in an effort to make a new governing coalition for a country. If the talks fail, the euro may fall down. The first level from the downside lies at 1.1080. After that, it is recommended to pay attention to the 1.1069 level.
- While the chance of the no-deal Brexit remains high, the pressure to the British pound intensifies. Today, the British Prime Minister Boris Johnson and the French President Emmanuel Macron are going to meet to discuss the possibility of a no-deal Brexit. The cable is currently trading above the 100-period SMA on H4, close to the resistance line at 1.2140. The next key level will lie at 1.2154. After that the retest of the 1.2174 level seems possible. From the downside, you need to pay attention to the support at 1.2118. If bears pull GBP/USD lower, the next key support will be placed at 1.21 (50-period SMA).
- NZD/USD has tested the lowest levels since 2016. On H4, bears tried to pull the pair below the 0.6377 level. If the kiwi continues to weaken against the USD, reaching the support at 0.6339 seems possible. In case of the reversal, pay attention to the 0.6419 level.
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
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