Note from the hourly chart above that the relative strength index (RSI) is only just at the 30 level that suggests the market has been oversold, so last month’s lows at 1.3591 on July 21 and 1.3572 the previous day look like reasonable targets for the bears. On the upside the trendline mentioned earlier, currently at 1.3737, will now provide resistance.
Note too that the US Dollar is still benefiting from the spread of the Delta variant of Covid-19, China’s corporate crackdown and the turmoil in Afghanistan. In addition, the minutes of the July meeting of the Federal Open Market Committee, released Wednesday, pointed to agreement to slow its pace of bond buying later this year. More detail is expected at the August 26-28 meeting of the Jackson Hole economic policy symposium.
