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.
Markets ahead of US inflation data
Here’s what you need to know:
- The US dollar rose from nearly a three-week low on Tuesday, driven by an increase in Treasury yields.
- Today traders await the US inflation data to be out at 15:30 MT. The better-than-expected inflation rate would mean that the US economy is recovering faster than projected. As a result, the USD will surge. If inflation is worse – the USD will drop.
- One of the Fed’s policymakers claimed that when 3/4 of the population are vaccinated, it would signal the close end of the pandemic and push the central bank to consider tapering its bond-buying program. That would push the USD further up.
- Nvidia bit off the piece of Intel’s market. It announced the launch of its first server microprocessors. As a result, Nvidia surged, while Intel dropped.
- Nasdaq and Bitcoin are trading near record highs. The reason is that Coinbase, the leading cryptocurrency exchange in the US, will go public on the Nasdaq index on April 14!
- China’s exports rose by 30% in March from a year earlier as global demand recovers.
If EUR/USD manages to break 1.1925, the way up to the 50-day moving average of 1.1960 will be open. On the flip side, if it crosses the 200-day moving average of 1.1890, it may fall to the low of April 7 at 1.1860. Upcoming US inflation data will define the movement of the pair. Ahead of that, it may move sideways.
Gold has approached the significant support level of $1724. The move below will drive the yellow metal to the key psychological mark of $1700. Besides, the strong USD is likely to press gold down. But if US sales are worse than the forecasts, the dollar will weaken and gold will rise. The move above $1745 will push the pair higher to the key resistance level of $1760.
Dollar, dollar, let’s discuss something different! For instance, EUR/GBP. There is a really interesting situation. The pair was falling from the start of the year but then reversed to the upside last week. Perhaps it’s the beginning of the new trend. Now it’s falling to the 50-period moving average of 0.8630. If may bounce off it and retest the recent high of 0.8690. The move above it will drive the pair up to the high of April 26 at 0.8730.
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 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).