USD weakening or Dollar strengthened?
Early today, Euro tried to continue its rally of Wednesday but failed at 1.90 and now again back under its critical level, sitting currently at 1.1850. With the ongoing changes in the US economy and the latest comment from FED members, we have to wait for unusual volatility in August for the US dollar.
Yesterday the Federal Reserve Vice Chairman Richard Clarita surprised market participants by bringing up the idea of rate hiking in 2023 and tapering from the beginning of 2022.
On the other hand, there is evidence that FED is trying to ease the liquidity level in the market, so ongoing demand with lower liquidy helping to stay steady. However, always lack of cash and liquidity in any market can end with sharp moves, which can be to the higher or lower levels, and it is one of the reasons that can make August so volatile this year, unlike a usually quiet month.
While we are expecting a choppy chart, we have to remember that Friday's job number must help the market find the direction.
Technically, 1.1850 is a key level, where soon 20 & 50 MA lines in the H4 chart can touch and probably cross each other. If 20 MA can cross the 50 MA line down, it can confirm the overall downtrend in the market, getting support with RSI at 44 and decreasing the OBV trend line.
