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.
EUR is on fire, while USD touches dips
A lot of news came out that may impact the market. It’s surely not the time to rely only on technical analysis!
- The market sentiment is still risk-on driven by vaccine news. Pfizer and its partner BioNTech announced that they will start supplying vaccine doses “within hours” after the approval.
- US authorities proposed the new relief package of 908 billion dollars, which is larger than was previously discussed.
- Fed’s Powell testified yesterday and warned that the US economy is ruined and the further recovery remains uncertain.
- US ISM Manufacturing PMI came out worse than expected: 57.5 vs. the forecast of 57.9. It added even more pressure on the USD, which was already trading at the low levels unseen since 2018.
- The governor of the Reserve Bank of Australia claimed that the economic recovery is underway, but it is still uneven.
- The Australian GDP beat estimates. It rose by 3.3%, while analysts anticipated 2.5%. As a result, the AUD edged higher.
- Joe Biden claimed that he wouldn’t immediately remove tariffs on Chinese goods. He is planning to consult with allies in Asia and Europe about the phase-one trade deal. USD/CNH may rise.
- Oil prices dropped as investors doubt OPEC+ will agree on further output cuts.
Watch the daily trading plan!
EUR/USD is aggressively moving upwards. It has broken through the key resistance of 1.2000 and approached the next barrier of 1.2100, which is a round number and also the peak of the 2017 year. If it manages to cross it, the way up to the 1.2150 will be clear. On the flip side, the move below the key support of 1.2000 will drive the pair to the 50-period moving average of 1.1925.
XAU/USD moved to the upside, but its growth was limited by the 50-period moving average of $1 815. If it manages to break through this resistance, it may jump to the 100-period moving average of $1 845. In case of falling, the pair will meet the strong support of the 200-day moving average at $1 800, and it’s likely to pull back from it. The breakout of this level will lead gold to the next support of $1 770.
The Australian dollar was underpinned by the better-than-expected GDP. If it breaks through Monday’s high of 0.7400 the way up to 0.7450 will be open. Support levels are at the recent lows of 0.7350 and 0.7325.
USD/CNH is moving back and forth inside of the horizontal corridor. Since it has touched the bottom and candlesticks have formed longer lower tails, we can expect the move up. On the way to the top of the range, it may meet the resistance of the 50-period moving average at 6.5700. Support levels are 6.5450 and 6.5350.
Follow the US ADP report at 15:15 MT time and the speech of Jerome Powell at 17:00 MT time.
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).