By the opening of the European trading session, USDX quotes were still held above the level of 91.50, while only their fixation above 91.80 will cancel the bearish scenario. But at the same time, it is important to keep in mind the proximity of the next target for sellers – 91.30. Accordingly, the potential for reduction is almost completely exhausted. Given the low saturation of the news background on the first trading day of the week, volatility may also remain very low.
The first attempt of the sellers to break under the support level 1.1950 was not successful, nevertheless there is still a risk of the corrective decrease to 1.1870. I would like to draw your attention to the fact that the pair is held in the narrow price range of 1.1950-1.1990, an exit from which can determine the further direction of the price movement in the short term. Above the psychological resistance level 1.2000 there is the upper boundary of the descending channel, thus increasing the importance of this barrier for buyers.
There will be no important releases from the Eurozone today, so trading volatility may remain moderate.
This currency pair quotes overcame the technical resistance level of 1.3800 and as a consequence, they fixed above the lower boundary of the uptrend channel. All this points to the advantage of the buyers and their willingness to continue to rise to 1.3910 and further to 1.4000. This scenario may be possible if the general weakening of USD and the appearance of additional bullish fundamentals for GBP. But I also note the absence of significant macroeconomic publications from Britain, so do not expect the appearance of strong price movements.
The volatility of trading continues to decrease, which may also be due to the low saturation of the news background. Nevertheless, it is important to understand that continuous consolidation of the pair quotes in a narrow price range indicates the uncertainty of the market and often ends with the emergence of a strong unidirectional price movement.
Targets for sellers: 108.35, 108.00 and 107.80. Pay attention to the density of support levels. Accordingly, only the emergence of a very strong bearish fundamental factor can put the necessary pressure on the pair to develop a more powerful downward wave.
The above overview is not a direct guide to action, but only a recommendation.