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.
Main market news on September 11
The market sentiment is mixed, but still, there are some interesting movements. Let’s have a closer look.
- US-China tensions have deteriorated after the USA canceled visas for 1 000 Chinese citizens. Besides, Donald Trump claimed that he wouldn’t prolong the deadline for Chinese company ByteDance to sell TikTok’s US assets.
- Yesterday the ECB held a meeting, during which it maintained a monetary policy and interest rates unchanged, as expected. The central bank also addressed the stronger euro as ECB’s President Christine Lagarde emphasized the steady economic recovery in the eurozone.
- US unemployment claims came out worse than analysts expected. 884 000 Americans filed for jobless benefits last week, while the forecast was 838 000. Unlike the poor labor data, the US core producer price index beat estimates and increased by 0.4%, while the forecast was 0.2%.
- Fears over Brexit talks weigh on the British pound. Yesterday that concerns were fueled by the ECB’s claim to take legal action if the UK imposes Internal Market Bill. This document was proposed by the UK Prime Minister Boris Johnson and it powers UK officials to modify some parts of the withdrawal agreement. As a result, GBP/USD, GBP/JPY, and GBP/CAD dropped significantly.
The most traded pair surged yesterday after the ECB report but failed to rally above the 1.1900 level. If it manages to jump above the high of September 4 at 1.1860, it will open doors towards 1.1900 again. Support levels are at 1.1800 and 1.1760.
EUR/GBP is edging higher. The move above the high of March 23 at 0.9300 will drive the pair higher to the next resistance of 0.9415. On the flip side, if the pair drops below the low of March 25 at 0.9150, it will fall further to the next round number at 0.9000.
Gold has been recently fluctuating near the $1 950 level. If it manages to cross it, XAU/USD will surge to $1 965. Support levels are at the recent lows of $1 925 and $1 910.
The stock index has started the day on the positive footing. If it jumps above the 200-period moving average at 3 380, it will jump to 3 400. Otherwise, if it falls below the yesterday low of 3 340, the way towards 3 315 will be clear.
Follow the US Core CPI report at 15:30 MT time! As always, if numbers are better than the forecasts, the USD will rise. Otherwise – fall. Stay tuned!
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
The crypto market keeps recovering. Bitcoin has broken above $57,000. The way up to $60,000 is open now!
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).
Great Britain will publish the Inflation Rate on October 20, at 09:00 MT time (GMT+3).
The bullish movement in the stock market is gaining speed, and Bitcoin ETFs are closer than they might seem. What do we need to know for the next trading week?