USD Gains Traction With A Focus On FOMC Minutes

As U.S. markets came back online after the July 4^th holiday so did the U.S. dollar strength with the greenback accelerating against the euro and pound sterling on Tuesday.

While we expected some extended rebounds in both EUR/USD and GBP/USD, the round price levels at 1.19 and 1.39 have proved to be the limit so far.

EUR/USD: The euro reversed by just shy of 1.19 and is currently heading towards the south looking at the 1.18-level. If 1.1780 breaks, we will watch out for falling prices towards 1.1730/1.17. Resistances are seen at 1.1950 and 1.20.

GBP/USD: After sterling bulls were unable to push the pound above 1.39, the price retraced, marking an intraday low at 1.3772. We still see a crucial support at 1.37 from where we could see some rebound but if bears are strong enough to push the pair significantly below 1.3670, traders should expect steeper losses towards 1.35. We still see a small resistance at around 1.3920.

Traders will pay attention to the Federal Reserve meeting minutes today at 18:00 UTC for more clues on when the Fed may begin tapering its stimulus. The dollar could thus gain some traction ahead of the release.