The US Dollar managed to regain some ground against most other major currencies today. This could have been partly driven by month-end flows, although the Greenback is also benefiting from strong economic data and ongoing speculation about an early monetary policy tightening by the Federal Reserve.
The key level to watch in EUR/USD is 1.1845. A clear break below this level could spell trouble for the currency pair and pave the way for a correction towards at least 1.17. The Daily RSI is not in oversold territory yet, hinting that there might be more room to the downside. To the topside, traders will be keeping an eye on the 200 DMA (currently near 1.1980), which has capped the topside in the past few trading days.
Meanwhile, USD/JPY was finally able to gain some momentum following several days of consolidating in a rather tight range. The breakout above 111 could attract further momentum buying and push the currency pair towards the 2020 high at 112.22.
To the downside, strong support can be expected between 110.32 and 110.41, followed by the rising trendline from the late May low.
USD/CAD is a currency pair worth watching in the next 24 hours. The OPEC+ meeting tomorrow could trigger significant price swings in Oil, which would also affect the Canadian Dollar. Should the organization show its cautious side once again, Oil prices are likely to extend gains, which could lead to a reversal in USD/CAD. The broad downtrend remains intact, and the negative RSI divergence on the Daily chart is another sign that the recent rally might have run out of steam.
Resistance is seen at 1.2485, followed by the April high at 1.2655. To the downside, traders can expect solid support at 1.2252. However, a breakout below this level could trigger momentum selling and push USD/CAD towards the psychologically important 1.20 support level.
Silver has shown slightly more resilience than Gold, and support at the 200 DMA continues to hold. Positive RSI divergence on the H4 chart is giving Silver bulls additional hope that XAG/USD might see a recovery in the short-term. However, it first needs clear resistance at $27 – the next major hurdle. Precious metals have lost their shine recently, amid rising risk appetite in global markets and slightly firmer US Dollar.
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The Federal Reserve is the headline act in markets this week, with US interest rates firmly in the spotlight.