USD Bears Hit Back: US Dollar Drops from Resistance at Prior Support

Talking Points:

– US Dollar weakness has shown quite visibly thus far on the fresh week, with the US Dollar dropping from the 95.00 area of resistance that had come into play around the Friday close. This level of 95.00 was the swing-high for the Month of May, after which this became a key area of support for the US Dollar as the currency gyrated throughout this summer. More recently, as USD-breakdown themes have become more pronounced after the August mid-point, prices have broken-below and are now finding resistance at prior support, keeping the door open for a deeper breakdown in USD.

– Both GBP/USD and EUR/USD are gaining as the Dollar is dropping, but noticeably weaker than USD over the past week has been the Japanese Yen. A Bank of Japan interest rate decision highlights this week’s economic calendar, and the prospect of additional Yen-weakness can keep the bid supported in pairs like EUR/JPY and GBP/JPY. Around the British Pound – we’ll likely continue to see Brexit headlines driving the flow, but we also have a CPI print on the calendar for this Wednesday, and this will likely bring impact to near-term price action.