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AUD/USD has been drifting lower since the beginning of this year. RBA is determined to maintain cash rate at accommodative levels until further notice while the Fed is hiking, which is keeping the pair from rallying. Each attempt at a bounce has fizzled out at two or so cents. 61.8% retracement of the 2016 - 2018 range is the level to watch on the downside.
al_dcdemo's Blog
EUR/USD sells off after ECB decision
It seems as if the dollar move higher after more hawkish than expected Fed came with one day lag. ECB may have done more steps in the hawkish direction than expected by many yesterday, but their pledge to hold rates at present level at least until summer 2019 contrasts starkly with Fed's projected one hike per quarter. EUR/USD is down 300 pips from yesterday's high.
EUR/USD well behaved ahead of the big events
There's no doubt that the Fed will hike its funds rate later today. The accompanying FOMC statement and economic projections will be of much more interest. The comittee took a step toward a more neutral bias at their most recent meeting. Should they continue in that direction, the dollar is bound to get sold. EUR/USD is trading in an ever tighter short-term range but any breakout will probably be limited, with ECB decision coming up tomorrow.
U.S. dollar struggles despite some bullish developments
Progress on U.S. tax reform, better than expected GDP revision and Janet Yellen with some hawkish comments have all been welcomed by the dollar bulls. Yet the currency struggled to make any significant headway today. Markets have continuously underestimated Fed's resolve to normalize rates in this cycle.
U.S. dollar rallies as Fed stays on track
Fed remains on track with monetary policy. Balance sheet adjustment will start in October. Most members are expecting another hike this year. Three more hikes are projected for 2018. Neutral rate was downgraded to 2.8% from 3.0%.
Market clearly expected something less hawkish from them. The dollar rallied across the board but the rally run out of steam after 100 - 150 pips of gains. Any further gains may not last because, fundamentally, nothing really changed today.
Market clearly expected something less hawkish from them. The dollar rallied across the board but the rally run out of steam after 100 - 150 pips of gains. Any further gains may not last because, fundamentally, nothing really changed today.
U.S. dollar doesn't rally after a strong labour market report
U.S. labour market report came in strong with Nonfarm Payrolls at 227K vs. 175K expected. Unemployment Rate (4.8%) ticked up but again in tandem with Participation Rate (62.9%). Average Weekly Earnings (MoM) was the only soft spot, yet that was what the market used as an excuse to sell the dollar.
Cautious Fed and U.S Administration's stance on currencies are likely the main reasons why the bulls hesitated. USD/JPY is holding above 38.2% retracement of the Trump rally. A successful break would p…
Cautious Fed and U.S Administration's stance on currencies are likely the main reasons why the bulls hesitated. USD/JPY is holding above 38.2% retracement of the Trump rally. A successful break would p…
RBA cuts again
The RBA cut its cash rate to a record low 1.50% from 1.75%. Rate statement does not look particularly dovish - there's no explicit hint of further easing though they didn't close the door on it either.
The reaction in the Aussie was in line with the cut being almost fully discounted. A spike lower was promptly reversed and the price was back to unchanged after a good hour. Still attractive yield, recovering commodities and Fed in no hurry to hike will keep the pair supported.
The reaction in the Aussie was in line with the cut being almost fully discounted. A spike lower was promptly reversed and the price was back to unchanged after a good hour. Still attractive yield, recovering commodities and Fed in no hurry to hike will keep the pair supported.
NFP day ahead
Tomorrow is a NFP day and, following recent dovish turn by the Fed, I would expect more U.S. dollar losses on a weaker than expected report than gains on a better than expected report.
If I'd have to guess, I'd say we would get overall slightly better than expected report. Price action would depend on the pair, but would probably involve taking out stops on both sides with the dollar ending up near unchanged on the day.
If I'd have to guess, I'd say we would get overall slightly better than expected report. Price action would depend on the pair, but would probably involve taking out stops on both sides with the dollar ending up near unchanged on the day.
EURo continues its weak pullback
Euro rose five cents from the ECB day low (~1.0820) to the post-Fed high (~1.1340) but fell short of the February high near 1.1380. Pullback has been weak and similar to the one from a week ago.
All things being equal and despite holidays, a surge towards 1.1450 cannot be ruled out in the days ahead. 1.12 (post ECB high) is the immediate support before stronger 1.10 - 1.1050 band (pre-Fed low, 200 DMA, 50 DMA, 1.10 big figure level).
All things being equal and despite holidays, a surge towards 1.1450 cannot be ruled out in the days ahead. 1.12 (post ECB high) is the immediate support before stronger 1.10 - 1.1050 band (pre-Fed low, 200 DMA, 50 DMA, 1.10 big figure level).
Cable snaps back
Contrary to what many market participants expected in light of strong employment and inflation readings in the U.S., the Fed were surprisingly dovish at their yesterday's meeting, citing global economic developments as main risk.
Cable rose 150 pips in the two hours after the release which added to 220 pips from the day's low. 50 DMA is the immediate resistance with last week's high (~1.4435) the next target. 1.40 support remains firmly in place as Brexit worries seem to subside somewhat.
Cable rose 150 pips in the two hours after the release which added to 220 pips from the day's low. 50 DMA is the immediate resistance with last week's high (~1.4435) the next target. 1.40 support remains firmly in place as Brexit worries seem to subside somewhat.