USD bounces back

USD/CHF awaits breakout

The US dollar bounces higher as traders bet on the Fed to stay on an aggressive tightening course. With the double top (0.9860) now out of the picture, the directional bias remains up as the greenback consolidates its gains over the 20-day moving average. The narrowing range between 0.9740 and 0.9950 could be a sign of accumulation. A bullish breakout would lift offers back to June’s high at 1.0040, a step closer to resume the uptrend in the medium-term. However, a deeper correction would bring the pair to 0.9620.

EUR/JPY seeks support

The euro weakened after the ECB minutes showed that a recession was "increasingly likely". A break above 143.50 the origin of a previous liquidation has prompted sellers to cover their bets. This is an indication of strong interest in maintaining the euro’s lead. As the RSI drops back to the neutral area, the former supply zone around 141.40 is the first level to gauge follow-up bids. A bounce would carry the single currency to the recent peak at 145.50. Otherwise, the pair may drift towards 139.30.

S&P 500 attempts to bounce

The S&P 500 treads water ahead of the nonfarm payrolls report in September. The index has been looking to claw back some losses after its drop below the critical floor at 3750. Sentiment remains downbeat though there could be short-term opportunities in the current recovery. A rally above 3670 has eased the selling pressure, turning it into a fresh support. 3900 is a major hurdle where the bears could be expected to double down. The bulls will need to clear this supply area before a rebound could gain traction.