EURUSD, H1
The dollar has opened in London about 1% higher following the Fed’s announcement yesterday, which confirmed the start of a QT program, as had been widely anticipated, but showed via the dot plot that another rate hike is in the works before year-end followed by another three hikes in 2018. The BoJ subsequently announced unchanged policy, recommitting to ultra-accommodative policy settings, while a new board member argued that further easing may be necessary. USDJPY logged a four-month high at 112.64, well up from levels near 111.30 seen before the Fed’s announcement, and subsequently settled around 112.50. EURUSD dove from around 1.2010 to a one-week low of 1.1861 before steadying. The narrow traded-weighted USD index clocked a one-week high of 92.49. The gains were concomitant with higher Treasury yields as markets re-price Fed policy expectations.
However, it is too early to judge if the USD bears have been squeezed completely, the Fed statement was more hawkish than expected and continues the post Jackson Hole (September 25) pattern, initiated by the BOC, taken up by the BOE and now move on again by the FOMC. Draghi’s speeches today and tomorrow awaited with added zest. I remain short EURUSD on the Daily chart from September 14 to 1.1823. The H1 chart has moved sideways during the Asian session and is looking to regain 1.1900 with support at 1.1860.
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.