The greenback turned higher against major rivals on Thursday with traders switched to some profit-taking in the European currencies. As for the cable, the technical correction is due to overbought conditions. The pound was rejected from mid-November highs around 1.31 and got back below the 200-DMA that was eroded yesterday for the first time since April 2018. The euro attracted a selling interest ahead of the ECB meeting as investors expect that Draghi’s tone will be cautious and ‘dovish’ due to the growing economic risks in the Eurozone.
In other news, as the US Senate vote on shutdown looms, the two parties remain in a standoff that prevents a full re-open of the federal government. The officials will vote on two bills – the Trump’s demands for border walls and a Democratic initiative that opposes additional funding for building a wall. Ad there are no signs of a progress towards a consensus, the vote could bring the dollar back under pressure at the end of the trading week.
In this context, the USDJPY pair may resume the downside move as in a negative scenario, the risk aversion will resume across the financial markets, which will give the additional lift to the safe-haven Japanese yen. As such, the pair that touched a high of 110.00 on Wednesday could challenge the 109.00 support. Once below this support area, the dollar will target 108.60.
In other news, as the US Senate vote on shutdown looms, the two parties remain in a standoff that prevents a full re-open of the federal government. The officials will vote on two bills – the Trump’s demands for border walls and a Democratic initiative that opposes additional funding for building a wall. Ad there are no signs of a progress towards a consensus, the vote could bring the dollar back under pressure at the end of the trading week.
In this context, the USDJPY pair may resume the downside move as in a negative scenario, the risk aversion will resume across the financial markets, which will give the additional lift to the safe-haven Japanese yen. As such, the pair that touched a high of 110.00 on Wednesday could challenge the 109.00 support. Once below this support area, the dollar will target 108.60.