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GBPUSD

The dollar rose against the majors, none more against the pound sterling as the pair tops the movers on the day, losing 156 basis points on the session.  Fueling dollar sentiment were better than expected economic figures in the morning coupled with stronger dollar sentiment, even as the imminent end to the tightening cycle looms above the economy.  According to the Conference Board, consumer sentiment improved above consensus figures, shrugging off higher fuel costs.  However, following the report, fears crept below that the good vibes may indeed be short lived considering the sustained level of fuel costs and continued pressure from rising interest rates and aMiddle East war.  Nonetheless, the report was enough to push the bias in the greenbacks favor.  Additionally bolstering positive sentiment was better than expected existing home sales, although the figure dropped against previous reports.  Subsequently, manufacturing activity in Richmond improved in contrast to reports in both Chicago and New York regions. 

Starting out the New York session strong, the major pair traded lower through consolidation support shortly following the mornings reports.  Breaking the 1.8500 figure to the downside, bidding support was absent till the current 1.8394.  The decline coincides with the 1.8391 figure (50 percent fib level from the 7/17-7/21 bull wave) on the 240-minute chart.  Further consolidation is expected heading into the Asian session as the overall range is likely to continue heading into Fridays GDP announcement.  However, for now, with stochastic reading oversold extension and MACD witnessing a forming bullish convergence, favors are leaving towards short rise in the pair, more than likely seen as a dead cat bounce towards further longer term downside.

USDCHF

Topping the second position on our list of the movers, the USDCHF major continued to rise as dollar bulls retained their bid tone throughout the session despite a rather positive Swiss indicator.  According to the UBS consumption indicator, domestic consumption in the Swiss economy was better than expected in the month.  Rising far above the consensus estimate, the report lent further indication that the regions economy is churning ahead nicely even as the Swiss National Bank ponders a halt in the current tightening bias.  But as has been the story in the past couple of weeks, let alone months, dollar fundamentals continued to hamper any movement in the majors otherwise.  Looking ahead, with a dearth of US economic data until Thursday, markets may be faced with profit taking on the days move.  As such, range bound conditions are likely to dominate the Asian session up till the overnight book is opened.  Subsequently, Swiss strength may come in the form of the German IFO survey.  Should conditions improve in Europes largest economy, further rate hikes and preceding growth may be at hand for the Swiss, lending to a rising currency.

Rising on the day, the USDCHF pair looks ripe for further momentum to the upside as the price action approaches the 1.2550 figure.  A key level heading into the Asian session, bulls will be looking for further opportunities after a mild pull back on incremental profit taking in the near term.  With that said, following current consolidation, price action looks to bottom out at the 1.2474 price (38.2 percent fib level from the 7/24-7/25 bull wave).  Should the level fail, 1.2450 is likely to keep bears at bay.  Acting as previously strong resistance, the figure is likely to give the pair short term support, owning up to another bounce higher and a test of the 1.2600 figure.  This notion, although countered by the overextended buying witnessed in the Stochastic, is in sync with MACD and a potentially upticking RSI.

USDJPY

The major currency broke the range bound atmosphere, at least in the intermediate term, rising the third highest of al the movers.  Once again, boosting the pair higher were dollar fundamentals in the morning as yen commentary took a back seat.  However, with plenty of data on the horizon, the dollars strength against the Asian denomination may be limited.  Looking ahead, tomorrows merchandise trade balance may offer a short term pick-me-up as the surplus is expected to grow on stronger exports.  Consumer prices are additionally expected to come in stronger as retail trade improvements.  However, should reports disappoint, not only will further Bank of Japan rate hike speculation run thin, carry trade notions will continue to bolster a move higher in the pair.  Even as monetary tightening is imminently looking to halt in the worlds largest economy, the interest rate spread continues to purport a good return, especially when compared to the still low 0.25 percent offered in the worlds second largest economy.  As a result, further sentiment of the aforementioned is likely to boost the pair to the 117.50 in the overnight as traders await the data releases.

Breaking above the topside resistance at 117, the current spot continues to consolidate heading into the Asian session.  Profit taking should purport a move down to retest the 38.2 percent fib on the 60-minute at 116.82, which in turn could initiate some buying on dips.  Should the level fail, a move to 116.63 is likely keeping the price action at the 50 percent fib on the 60-minute shot.  Oscillators are confirming the decline, at least in the immediate, as both RSI and Stochastic dip below benchmark over bought levels with MACD not too far behind.