There was some pushing and pulling in the dollar after the Fed last week. But at the balance, the greenback is keeping steadier with a modest rebound against some of the major currencies bloc. EUR/USD is keeping with a rejection of the 1.1900 mark while GBP/USD slides back to under 1.3500 for now, keeping just below its 100-day moving average of 1.3479.
Both pairs are seeing the near-term bias switch back to favour sellers but things are looking calmer at least to start the new week. The change among dollar pairs so far today is light, with less than 0.1% across the board.
Traders are still largely digesting what to make of the post-Fed mood, that especially now that the onus is on US economic data to prove market players wrong with regards to the Fed outlook.
As things stand, traders are pricing in ~44 bps of rate cuts by year-end. As such, any major softness in the dollar and dovish pricing will be more limited with nearly two 25 bps rate cuts already priced for October and December.
Of the dollar pairs this week, do keep an eye out for USD/JPY. The pair has been in consolidation mood for a while now and may look for a break on either side of its daily moving averages. The 200-day moving average (blue line) is one that sits nearby now with the pair holding just above 148.00 to start the week.
That's one that could lead to something a bit more interesting at least in the FX space during the course of this week.
