As previously mentioned on multiple occasions, the strength of the major currencies traded against the U.S. dollar on the foreign exchange (Forex) market was based solely on the fundamental weakness of the American currency due to the widespread uncertainty triggered by Trump's global tariff war mechanism. A reduction in the influence of this factor could have a noticeable positive impact on demand for the dollar, providing it with broad support. At the same time, the Bank of England still reserves the right to continue cutting interest rates.
From a technical standpoint, the pair remains in a medium-term uptrend, but a local strengthening of the dollar may lead to a decline toward the lower boundary of this trend, followed by a deeper drop.
Technical Setup and Trade Idea:
- The price is below the middle line of the Bollinger Bands, above the SMA 5, but below the SMA 14.
- The RSI is below the 50% mark but still rising.
- The Stochastic is crossing the 50% level.
If the pair does not rise above 1.3680, a downward reversal and a drop to 1.3590 should be expected. The sell entry level could be at 1.3660.
