Carney was less hawkish than expected which saw cable longs unwind slightly although the downward reaction was rather muted considering. We also had a poor ZEW and much better than expected US Consumer Confidence and Home Sales data which added to the downside for the European pairs. A failure to break to the recent upside saw Aussie longs unwind somewhat too in sympathy.
Wednesday sees US Durable goods and final GDP as data points to focus on so we may push lower for the European pairs once again if data impresses to add to the minor momentum lower however several of the index charts look ripe for a break of trend, particularly the Euro so the struggle to hold onto gains from the dollar could translate into some downside. If data is poor this will align with the market’s bearish USD bias over the past week or two and see the European pairs rally for a break of trend.
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Yet again we’ve gone totally nowhere for the dollar. We’ve pushed higher and lower than the range of yesterday but really we are directionless until the next data point. As such the resistance showing EURUSD 1.3575 remains untested and the support at EURUSD 1.3624 remains untested. These levels should decide the flow with a clean break of either the trigger. I neutral USD although prefer downside in the short term
**USD% Index Resistance (EURUSD support): EURUSD 1.3600, 1.3575**
**USD% Index Support (EURUSD support): EURUSD 1.3609, 1.3624**
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