Hong Kong stock index extended a decline sparked by China’s tech crackdown. Tesla posted better-than-expected results. Jump in!
Dovish Fed pressed down USD
- The Fed pledged to keep near-zero rates at least through 2023. Besides, the bank left asset purchases unchanged at $120 billion a month. The dovish message pressed down the US dollar. As a result, EUR/USD and GBP/USD surged.
- The decision was made despite inflation worries in financial markets. The Fed raised forecasts for economic growth and the labor market: GDP from 4.2% to 6.5% and unemployment to 4.5% this year.
- Matthews Asia said Fed’s actions are “very bullish for risky assets”. S&P 500 hit a record high on Wednesday and Dow Jones reached the all-time high of 33,000.
- The Australian dollar surged to the two-week high after the better-than-expected labor data.
EUR/USD had a huge swing up after the Fed report but failed to cross the 38.2% Fibonacci retracement of 1.1990. If it manages to do so, the way up to the 50.00% Fibo level of 1.2040 will be open. On the flip side, the move below the intraday low of 1.1955 will drive the pair down to the 50-period moving average of 1.1930.
GBP/USD has broken through the 38.2% Fibonacci retracement of 1.3950. So, the way up to 1.4000 is open! However, it shouldn’t cross this resistance on the first try as it lies at the 50% Fibo level. Support levels are 1.3950 and 1.3885.
USD/CAD has broken through the psychological level of 1.2400, the level unseen since January 2018. Thus, the way down to the next round number of 1.2300 is open now. However, the RSI indicator has almost crossed the 30.0 level, an indication the pair is oversold. Thus, the reverse up may happen soon. Resistance levels are at the recent highs of 1.2735 and 1.2875.
AUD/USD has approached the 61.8% Fibo level at 0.7840. If it breaks it, it may jump to the 78.6% FIbo level of 0.7910. Support levels are 0.7785 and at the 50-day moving average of 0.7730.
Follow the Bank of England’s meeting at 14:00 MT and keep an eye on the GBP!
The overall market sentiment is risk-on. The S&P 500 index (US 500) is getting close to the all-time high. Oil is recovering quickly from its recent losses.
PMI reports from the EU, the UK, and the USA will be released during the day!
The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!
What will happen? The US Q2 Gross Domestic Product will be announced at 15:30 MT time (GMT+3) on Thursday, July 29…
Today the Fed will make a policy statement at 21:00 GMT+3. This event will affect all the currency pairs with the USD and thus almost the all Forex market!