Range Markets

In line with expectations, a combination of the 55-, 100- and 200-hour SMAs pushed the rate downwards, leading to dissolution of the one-month long ascending channel.

The plunge happened despite release of worse than expected non-manufacturing data, which means that markets are mainly focused on talks between the House and Senate about tax reform.

Most probably these expectations will continue to nourish the buck through the whole week. On hourly chart this scenario nicely matches with a minor descending channel whose existence was additionally confirmed by a rebound from the monthly PP at 1.1806.

Accordingly, today the pair is trying to return back to the 1.1866 level. The most likely scenario is that this attempt will be neutralized by one of the above MAs. In this sense, a release of the US employment data is unlikely to change the situation.

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