On Wednesday, the U.S. dollar index gained bullish momentum on the release of Fed rate decision. The U.S. dollar index edged up to trade around seven-week high against the safe-haven currency Japanese yen. It's mostly because interest rate cut was eventually priced in and the rest of the policy was hawkish as only 7 of the members voted for the rate hike, and no additional rate hike is expected to come in 2019.
FOMC & Fed Fund Rate
On Wednesday, the Federal Reserve cut its interest rate to 1.75% to 2%, predicting one more rate cut in 2019. The central bank has lowered rates two times in the past two months in the wake of the U.S. China trade war.
However, the vote was 7-3 as James Bullard, the President of Fed St. Louis favored a partial-point cut.
Whereas, Eric Rosengren, the President of Boston Fed and Esther George President of Kansas City Fed, refused for the second meeting in a row, favoring no rate reduction.
Looking forward, ten senior Fed executives proposed no further rate reductions this year, but seven observed one more cut as feasible.
EUR/USD - Fibonacci Retracement & Bullish Trend line Supports
The single currency euro gains support against the U.S. dollar at 1.1020 area. The pair traded bearishly as investors as the dollar strengthened after the Fed rate cut and hawkish sentiment policy.
The single currency Euro is now gaining support after ECB policymaker Francois Villeroy remarked the EU corporate sector would benefit if attempts were made to promote the international application of the shared currency.
Villeroy suggested offering payment transfer systems in euros, and it should be more efficient and practical.
EUR/USD - Daily Technical Analysis
The technical side of the EUR/USD is suggesting a bullish bias. As you can see in the chart, the pair has completed 61.8% Fibonacci retracement around 1.1020 level. The EUR/USD has formed Doji candles which are signaling bullish bias among traders.
The RSI and MACD are coming out of the selling zone and soon are expected to show a bullish crossover. Typically such bullish crossovers drive buying in the market.
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EUR/USD - Technical Levels
Support Resistance
1.0969 1.1058
1.0936 1.1115
1.0847 1.1204
Pivot Point 1.1026
EUR/USD - Daily Trade Sentiment
Today, the EUR/USD can stay in buying over 1.1020 with the aim of 1.1060 and 1.1085. Whereas, the selling can be seen below the 1.0995 area.
AUD/USD - Slips Dramatically, Dollar Strengthens
The Australian dollar has dropped dramatically lower, from 0.6850 area to 0.6789, testing the 50% Fibonacci retracement level. The Australian dollar has fallen for another day as traders feel pressure from the Federal Reserve interest rate decision. Although the Fed cut the interest rate, the overall policy sounded very hawkish.
FOMC member was not unanimous about cutting the interest rate as the vote was 7-3 as James Bullard, the President of Fed St. Louis favored a partial-point cut, but other members weren't in favor, causing a surge in the U.S. dollar.
Besides that, the U.S. China relation hasn't improved much lately as there haven't been not many updates on it.
AUD/USD - Daily Technical Analysis
After a sharp fall, the AUD/USD currency pair is facing support above the 50% Fibonacci retracement level of 0.67880. The bearish trend still seems pretty stable, and we may see a continuation of a pattern until 0.6765 but only in case of bearish breakout of 0.6788 level.
On the 4 hour chart, the 50 periods moving average is keeping the Aussie under strong bearish bias while the RSI and MACD are massively oversold.
AUD/USD - Technical Levels
Support Resistance
0.6851 0.6881
0.6837 0.6898
0.6807 0.6928
Pivot Point 0.6868
AUD/USD - Daily Trade Sentiment
Since the RBA was dovish, we may see selling trades and sentiment in the market today. The AUD/USD can stay bearish below 0.6850 until 0.6810 today.
Gold - XAU/USD - Recovers Earlier Losses
On Thursday, the precious metal gold prices recovered from earlier losses which came from the Fed rate cut decision
The yellow metal fell over 1% in the previous session as the absence of certainty on the U.S. Federal Reserve’s upcoming monetary policy easing held investors warily.
The Fed reduced interest rates for the other time this year in a 7-3 vote on Wednesday but signaled further cuts are unlikely as the labor market remains strong.
The cut was widely expected, but the split vote has raised some concern about predicting the future path of monetary policy.
Gold - XAU/USD - Daily Technical Analysis
Gold fell dramatically over FOMC and Fed rate decision. As per dot plot, no additional rate hike is expected in 2019. Gold may retrace upward today above 1490 to 1499 areas. On the lower side, it as support around 1,484 zones.
On the 4 hour timeframe, gold may find support at 1,484 as it's a triple bottom pattern. The EMA is also staying at the 1500 level, signaling bearish trend and selling bias for today.
Lastly, the leading indicators, the RSI and MACD are still in the bearish zone so we may need to extend bearish reversal below 1,500 today.
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Gold - XAU/USD - Daily Technical Levels
Support Resistance
1494.1 1507.91
1486.88 1514.5
1473.08 1528.31
Pivot Point 1500.69
XAU/USD - Daily Trade Sentiment
Gold may retrace upward today above 1490 to 1499 areas to target 1,500 level. On the lower side, it as support around 1,484 zones. Bullish retracement expected today.
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