Greenback firms after positive US manufacturing data
The US dollar index staged a comeback on the foreign exchange market this week, following the release of much better-than-expected US manufacturing data. The US dollar firmed against a broad basket of currencies after the August ISM Manufacturing survey rose to its highest level in nearly two years. Traders moved back into the greenback following a major multi-month sell-off, which was sparked by fears that the FED is weakening the value of the US dollar. The US dollar also held firm despite the US ADP private sector unemployment report coming in weaker than economsits had been expecting.
- The EURUSD pair is only bearish while trading below the 1.1780 level, key support is found at the 1.1680 and 1.1540 levels.
- The EURUSD pair is bullish while trading above the 1.1780 level, buyers may test towards the 1.1960 and 1.2100 resistance levels.
Bitcoin and host of top cryptos came under selling pressure this week, as traders booked profits amidst a strong recover in the value of the US dollar. Bitcoin started the week on strong footing, with the number one cryptocurrency rallying above the $12,000 resistance level. Weak demand for the pioneer cryptocurrency above the $12,000 level caused a major technical sell-off back towards the $10,500 level. Ethereum incurred significant volatility this week, as the second-largest cryptocurrency rallied towards the $490.00 level, and subsequently reversed back towards the $390.00 level as the broader cryptocurrency marke came under pressure.
- The BTCUSD pair is only bearish while trading below the $11,100 level, key support is found at the $9,900 and $9,400 levels.
- If the BTCUSD pair trades above the $11,100 level, buyers may test towards the $12,100 and $12,500 resistance levels.
The British pound rallied to a yet another 2020 high against the US dollar currency this week, with the GBPUSD pair moving within touching distance of the 1.3500 level. Traders moved into the British pound following the recent major technical breakout above the 1.3300 level. Sterling eventually reversed back towards the 1.3250 area, as the Bank of England Governor, Andrew Bailey, noted that the central bank still has room for further policy measures. The British pound also benefitted from ongoing weakness in the FTSE 100, as the UK index and sterling often share a strong inverse trading relationship.
- The GBPUSD pair is only bearish while trading below the 1.3290 level, key support is found at the 1.3150 and 1.3000 levels.
- The GBPUSD pair is bullish while trading above the 1.3290 level, buyers may test towards the 1.3380 and 1.3500 resistance levels.
The commodity sector came under heavy selling pressure this week, with precious metals and the oil market incurring the worst declines. Gold reversed sharply from the $1,990 resistance level in early week trade, and fell back towards the $1,920 area as investors move back into the US dollar. Silver slipped back under the $26.50 level, following weak demand and failure to overcome the $29.00 resistance level. WTI oil and Brent oil also suffered from a lack of overall buying demand, and weak fundamental news in the oil market.
- XAUUSD is only bullish while trading above the $1,920 level, key resistance is found at the $2,000 and $2,080 levels.
- XAUUSD is only bearish while trading below the $1,920 level, key support is located at the $1,880 and $1,820 levels.