The forex currencies were largely subdued on Wednesday as traders awaited key economic signals and the minutes from the Federal Open Market Committee (FOMC) meeting, which are expected to provide insight into the Fed’s stance on future interest rate hikes. The dollar held firm against most major currencies, supported by anticipation of hawkish signals from the Fed, despite recent data pointing to a slowdown in economic momentum. Broader Asian currencies remained mixed as concerns over global growth and the ongoing geopolitical tensions weighed on market sentiment.
The Japanese yen remained under pressure, with the USD/JPY pair fluctuating around the 145.80 level. The yen’s weakness persisted despite the release of Japan’s National Core CPI data, which showed a slight uptick in inflation, reinforcing expectations of no immediate policy tightening by the Bank of Japan. Market participants were cautious ahead of the FOMC minutes, which could provide further clues on the Fed’s monetary policy trajectory.
Meanwhile, the Canadian dollar showed some resilience, with the USD/CAD pair moving lower as crude oil prices rebounded from earlier losses. The market is awaiting the release of Canadian Retail Sales data, which could influence the loonie’s direction. The pair was last seen trading around 1.3595, with market sentiment remaining cautious ahead of the economic data release.
The British pound gained some ground against the dollar, with the GBP/USD pair rising towards the 1.3060 level. The pound’s strength was underpinned by better-than-expected UK PMI data, which indicated a resilient manufacturing sector. However, gains were capped as traders awaited the release of the ECB monetary policy meeting accounts and the Jackson Hole Symposium, which could impact the broader market sentiment.
USD/CAD
Technicals in Focus
On daily charts, the USD/CAD pair is sustaining above the 100DMA (1.3595), providing immediate support. The MACD remains above the zero line, with histograms in an increasing mode, supporting a bullish view. The Stochastic Oscillator is in oversold territory, indicating a potential upward correction. The 14D RSI is currently in a neutral region, offering no clear directional signals at this time.
Trading Strategy: Neutral to Buy
Buy above 1.3590-1.3570 with targets at 1.3620-1.3650 and 1.3700-1.3720 with a stop loss below 1.3550. Sell below 1.3550-1.3530 with targets at 1.3500-1.3480 and 1.3450-1.3420 with a stop loss above 1.3600.
GBP/USD
Technicals in Focus
On daily charts, the GBP/USD pair is sustaining above the 50DMA (1.3060), which has become a support level. The 14-D RSI is currently in a neutral region, making directional predictions challenging. The Stochastic Oscillator is in the oversold territory and gives a positive crossover, supporting a bullish outlook. The MACD is above the zero line, and histograms are increasing, suggesting a potential upward movement.
Trading Strategy: Neutral to Buy
Buy in between 1.3050-1.3030 with a target of 1.3100-1.3140 and 1.3200-1.3240 with a stop loss below 1.3000. Sell below 1.2990-1.2960 with targets at 1.2930-1.2900 and 1.2850-1.2800 with a stop loss above 1.3050.
USD/JPY
Technicals in Focus
In daily charts, the USD/JPY pair is sustaining above the 100DMA (145.80), offering major support on the daily chart. The 14-D RSI is currently in the overbought region, suggesting the possibility of a downward correction. The MACD is above the zero line, but histograms are in decreasing mode, which might lead to downward movement. The Stochastic Oscillator is in the overbought territory, signaling a potential sell-off as it gives a negative crossover, confirming a bearish stance.
Trading Strategy: Neutral to Sell
Sell below 145.50-145.00 with a risk above 146.00 targeting 144.00-143.50 and 143.00-142.50. Long positions above 146.00-145.50 with targets of 147.00-147.50 and 148.00-148.50 with stops below 145.00.