The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
Bearish market on Thursday
- Fed has held the first meeting this year, where it leaves both rates and QE pace unchanged. The bank takes a wait and see approach, while the debt is mounting. Analysts believe that no changes from Fed may be understood as an indirect light-tapering scenario. Higher real rates could be unveiled already in the next quarters.
- Elsewhere, Fed’s Powell said that the US economy was still far away from full recovery during his press conference.
- Nasdaq plunged as the earnings of Tesla came out worse than the estimates. Apple and Facebook published better-than-expected results, but still, it wasn't enough to satisfy investors. Facebook warned of “significant uncertainty” in 2021.
- The EU has failed to resolve its problem with vaccine delays. Germany lowered its 2021 economic growth projections. The UK involved stricter restrictions to contain the virus spread.
EUR/USD is falling towards 1.2050 as was predicted by TD Securities. It has just crossed the support of 1.2100, therefore there are no obstacles for the price to dip further. The pair is unlikely to break through 1.2050 on the first try, so we should expect the pullback initially. If it finally manages to break this support, the way down to the key psychological mark of 1.2000 will be clear. Resistance levels are 1.2130 and 1.2170.
GBP/USD has approached the support of 1.3650, which it has failed to cross several times this month. Therefore, we would expect the pair will pull back to the upside rather than break out it. However, if bears are strong enough to press the price below 1.3650, the doors towards the key psychological mark of 1.3600 will be open.
AUD/USD has finally escaped the symmetrical triangle it has been trading inside since December. If bears are strong enough, they may break the support of 0.7600 and drag the price to the low of December 28 at 0.7570. Resistance levels are at the 200-period MA of 0.7665 and yesterday’s high of 0.7750.
USD/CAD has just broken through the resistance of 1.2830, clearing the way up to the psychological level of 1.2900. The move above it will drive the price further up to 1.2950, the high of December 21. Support levels are 1.2775 and 1.2700.
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
Australia will release employment change and an unemployment rate on Thursday, October 14, at 03:30 MT (GMT+3).
The US dollar is heading to close the seventh day in the red as it remains under selling pressure. The US data at 15:30 GMT+3 (jobless claims and Philly Fed Manufacturing Index) may support the greenback if it's strong.
Canada will publish the Retail Sales and Core Retail Sales on October 22, at 15:30 MT time (GMT+3).
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).