EURUSD has pushed aggresively higher after confirming a Head and Shoulders bullish reversal chart formation but prices are now turning lower having tested resistance at 1.3266, the 76.4% Fibonacci retracement of the 4/12-6/7 downswing as well as the upside target implied by measuring the distance between the head and neckline of the H&S formation. I will look for confirmation on a daily close below the bottom of a rising channel established from late June (now at 1.3199) to position for a selling opportunity.

The US Dollar is rallying amid renewed risk aversion after bouncing off key technical support. Will the Fed interest rate decision on Tuesday aid the rally or send the greenback back to multi-month lows?

Continued declines in forex market volatility expectations point to small currency movements in the weeks ahead. Yet a continued US Dollar downtrend suggests that key pairs may continue to set fresh lows and highs. The mix of low volatility and steady trends leaves us in a difficult position as far as trading strategy bias is concerned. On the one hand, range trading strategies tend to outperform during times of slower currency moves. On the other, our trend-following Momentum strategies have outperformed on continued US Dollar losses.

Currency markets continue looking to risk appetite to lead exchange rates but the road ahead is clouded after a mixed response to last week’s US jobs report, with traders now focused on the Federal Reserve’s policy announcement amid a search for greater clarity.

US Dollar Slips on NFPs but Risk Trends Could Rally the Currency

Euro Rally at Risk Ahead of German GDP Data, Major Technical Levels

Japanese Yen May Extend Gains As Retail Traders Look For a Correction

British Pound Torn Between Risk Trends, Monetary Policy Outlook

Canadian Dollar: Will Risk Trends Override Weakening Fundamentals?

Australian Dollar Momentum and Sentiment Point to Gains

New Zealand Dollar to Look Past Retail Sales, Trade on Risk Trends

Gold’s Best Run in Seven Months Still Lacks the Conviction of $2,000

EURUSD: Are Sellers Ready to Reclaim Momentum?

GBPUSD: Bulls Clear Resistance, Challenge 1.60

USDJPY: Long Position Stopped Out, Bias Still Bullish

USDCAD: Candlesticks Hint Upswing Ahead

AUDUSD: Prices Clear Fib Level, Eying April Top

NZDUSD: Double Top in Place Below 0.74 Figure?

Choppy U.S. dollar price action has led to mixed forex trading crowd sentiment, moderating our conviction in calling for further USD weakness.

EURUSD – Euro Forecast Calls For Gains Against Dollar

GBPUSD – British Pound Likely to Rally Further

USDJPY – Japanese Yen Outlook Bullish on Sentiment

USDCHF – Swiss Franc May Strengthen against Dollar

USDCAD – Canadian Dollar Forecast to Appreciate Against Greenback

GBPJPY – British Pound Direction Unclear Against Japanese Yen

View individual currency SSI charts in our FX Sentiment section

Interested in building your own SSI-based strategy? Request SSI data on our forex forum.

As widely expected, the Bank of England left its key overnight lending rate and asset purchase program unchanged in August. The British pound was relatively unchanged following the rate decision as traders priced in a zero percent chance for a rate hike prior to the decision, according to the Credit Suisse overnight index swaps. Market participants will now shift their focus to the Bank of England minutes which are expected to be released on Wednesday August 18th. Meanwhile, the ECB also kept their benchmark interest rate unchanged, while Jean-Claude Trichet said that the central bank remains cautious.

Choppy U.S. dollar price action has led to mixed forex trading crowd sentiment, moderating our conviction in calling for further USD weakness.

• EURUSD – Euro Forecast Calls For Gains Against Dollar
• GBPUSD – British Pound Likely to Rally Further
• USDJPY – Japanese Yen Outlook Bullish on Sentiment
• USDCHF – Swiss Franc May Strengthen against Dollar
• USDCAD – Canadian Dollar Forecast to Appreciate Against Greenback
• GBPJPY – British Pound Direction Unclear Against Japanese Yen

View individual currency SSI charts in our FX Sentiment section

Interested in building your own SSI-based strategy? Request SSI data on our forex forum.