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.
Daily news: positive data for the GBP and NAFTA uncertainities
- China's premier Li Keqiang made a speech at a World economic forum in Tianjin. Alongside with the words about the difficulties on the macro level, he noted that the country would not devalue the currency to support export. The aussie reacted immediately, reaching its highest level from the beginning of the month. AUD/USD is gaining a lot this week, aiming to cross 50-day MA at 0.73. If it is successful, the next resistance is at 0.7380. However, any negative news concerning the US-China trade conflict can change the situation to the opposite side. The support is at 0.7140.
- New Zealand published the volume of current account deficit in the second quarter. The deficit came out bigger, than it was forecasted (-11.7 billion vs -11.1 billion). However, it did not have influence on the currency, as the qiwi also reacted on the Keqiang statement, not as much as the aussie, though. NZD/USD bulls are aiming towards the resistance at 0.6720. If the market turns bearish for the pair, the support level to focus on is at 0.6550.
- Britain and the EU are excited for the upcoming today’s UK Prime minister Theresa May speech. She hopes that the agreement between Great Britain and the EU for the future partnership after Brexit is going to be achieved in a short period of time. She also noted, that the EU would show flexibility and goodwill in these negotiations. This speech will certainly affect the performance of GBP/USD. In other news for the pair, the British price and inflation indexes were published today. The actual numbers are happen to be better, than in the forecast: 2.7% for CPI, 3.5% for RPI, 3.1% for HPI, so we expect the British currency to blow off. For now, the pair trades in the green zone, crossing the 100-day MA. The next resistance for the price is placed near 1.3320, after which it is possible for the price to test the resistance at 1.3470. If the price goes down, the support to keep an eye is at 1.3032.
- The Bank of Japan leaves its monetary policy unchanged and keeps low rates at -0.10% for a longer period of time. Yesterday USD/JPY overcame its two-month highs due to the USD strength. The end of the day can affect the situation as the level of building permits, housing starts and crude oil inventories are to be released. The resistance for the bullish situation is at 113.10. For the bearish market watch the support at 110.50.
- Eurozone is anticipating the speech of the ECB president Draghi at 4 pm MT at a conference in Berlin. This may affect the pair EUR/USD. Today the pair crossed the 1.1700 barrier and has moved towards the resistance at 1.1790. If the outcome of either Draghi or May speeches is negative, the price falls down. In this case, the support to look at is at 1.1515.
- As NAFTA talks between the US and Canada keep going, the uncertainties concerning the negotiations bring USD/CAD to slide down to its last-month lows. Thursday is the deadline for the official paperwork submission, leading to the agreement. However, Canadian prime minister Justin Trudeau made a statement that he would rather agree on “no-deal” outcome, than on the inconvenient conditions for Canada. The support line for now is at 1.290. However, if the pair gains, the resistance is at 1.310.
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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).