The British monthly GDP is announced on Friday at 09:00 MT time.
Main market news on September 23
The US dollar has broken through the key resistance, it failed to cross since March so far. Riskier assets are dipping. Let’s discuss it in detail.
- The UK Prime Minister Boris Johnson imposed new restrictions for six months to cope with the fresh virus outbreak in the country. He claimed that the UK is at a “perilous turning point” for the fight with the Covid-19. Besides, EU and UK negotiators are supposed to meet for informal talks about Brexit. Investors are waiting for some hints today.
- The Federal Reserve made a statement yesterday and claimed that the economy stays resilient, but still, there is a slow recovery ahead, which requires further support. In addition, the central bank mentioned that it may raise interest rates even before reaching the target 2% of inflation.
- US-China tensions are simmering again as the US President Donald Trump again publicly blamed China for the spread of the Covid-19.
- The Reserve Bank of New Zealand held a meeting early in the morning and left rates at the current record lows of 0.25% and asset purchases unchanged, and also pledged to do more, if needed. Moreover, the central bank highlighted the possibility of negative rates.
The most traded pair has fallen to lows unseen since July 27 just below 1.1700. Since the pair has broken this key support, it’s likely to decline further to the next support at 1.1600. In the opposite scenario, if it manages to jump above 1.1700, the way to 1.1755 will be open.
The yellow metal has dropped after the Fed’s report. It has just broken the low of August 12 at $1 880, therefore, the doors are open to the next round number at $1 870. In the opposite scenario, if it rises above the key psychological mark of $1 900, it may surge to yesterday’s high of $1 920.
The British pound is moving down. It has just crossed 100- and 200-day moving averages at 1.2730. That’s why traders expect the pair to plummet to the next support of 1.2600 and then to the low of July 16 at 1.2550. On the flip side, the move above the 1.2730 mark will clear the way to 1.2800.
The kiwi has been declining for the third day in a row. It has just broken through the 50-day moving average and the significant support of 0.6600. That’s why the way to the low of August 24 at 0.6525 is open. Resistance levels are at the high of July 30 and September 18 – at 0.6700 and 0.6790, respectively.
Follow further news:
- European Manufacturing and Services PMI reports will be out at 11:00 MT time.
- The UK PMI reports will be released half an hour later.
- The US PMI reports will come out at 16:45 MT time.
- Fed’s Powell will testify at 17:00 MT time.
- Crude oil inventories will be reported at 17:30 MT time.
The day is full of economic releases! Stay tuned!
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The US unemployment claims are out on Thursday at 15:30 MT time.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.