US Dollar holding on to 96.00 and above

Pablo Piovano FXStreet

After reaching fresh daily highs in the 96.30 region, the US Dollar Index has now returned to the 96.10/00 band.

US Dollar supported near 95.80

The index has extended the bearish note to fresh multi-month lows near 95.80 early in the European morning, although it managed to regain upside traction to the 96.30 area after the ECB said that markets misjudged yesterday’s hawkish comments by President M.Draghi.

USD stayed apathetic after yesterday’s innocuous comments by Chief J.Yellen, who argued that the likeliness of another crisis is close to zero, as the banking system is now stronger. Furthermore, she stressed that the Fed will reduce its balance sheet ‘gradually and predictably’.

In the meantime, yields of the US 10-year benchmark are advancing for the second straight session so far, albeit retreating from earlier daily tops near 2.26% to the current 2.215%

Data wise in the US today, May’s pending home sales are due along with the EIA’s weekly report on US crude oil inventories, although the bulk of the attention would surely be on speeches by central bankers at the ECB Forum in Portugal.

US Dollar relevant levels

The index is losing 0.09% at 96.09 facing the immediate support at 95.85 (2017 low Jun.28) followed by 94.95 (low Sep.22 2016) and finally 94.05 (low Aug.18 2016). On the flip side, a breakout of 96.95 (21-day sma) would open the door to 97.02 (10-day sma) and then 97.56 (high Jun.15).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold falls as US Dollar, Treasury yields rebound ahead of Fed Minutes

Gold falls nearly 1.20% as the US Dollar and US Treasury yields resume their advance. Traders await the FOMC Minutes for fresh clues on the likelihood of another rate hike before year-end.

Crypto Today: Bitcoin, Ethereum and XRP fall liquidating $550M

Bitcoin’s correction follows a recent rejection due to supply around $87,200. Altcoins are generally in a correction trend, as Ethereum edges lower toward the next key support at $2,600 and Ripple extends its down leg near the $1.45 demand area.

Risk sentiment sours, as UK employment picture darkens

Risk sentiment is deteriorating further as we move through Wednesday. The price of Brent crude oil is now above $102 per barrel, the sell off in European stock indices is deepening, and the gold price is lower by more than 1%.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.