News on October 11

The stock market experienced a massive sell-off tonight. Most of the major indexes fell including the S&P, the NASDAQ and the Dow. The reason for this plunge lies in rising US treasury yields and renewed worries about the trade war. Later the US president Trump made comments concerning the Fed policy. He called the policy of hiking rates crazy and unnecessary. As the result of his words, the greenback weakened. Up to this moment, it is testing the support at 95.00 (50-day MA). In addition, the levels of CPI and core CPI for the United States will be released today at 15:30 MT time. It's expected that the figures will increase by 0.2%. If the actual data overcomes the forecasts, the US dollar index can move up to the resistance at 95.23. Otherwise, it can move below the support at 95.00 and continue to fall to the next support at 94.68 (100-day MA).

While the USD dropped against most of the major currencies, this fall did not support the CNY significantly. Because escalating trade tensions and rising global debt do not allow the Chinese currency to recover. On a daily chart, USD/CNY is testing the resistance at 6.9388. Earlier today the International monetary fund (IMF) director Christine Lagarde suggested China apply currency flexibility. In addition, China's Commerce ministry announced the country will resume trade talks with the US. This step will probably support the CNY. In that case, the support for the pair is at 6.9164.

Yesterday the EU Brexit negotiator Michel Barnier said the sides agreed on the most outlines of the withdrawal agreement ahead of the upcoming summit of the bloc's 28 national leaders. However, the Irish foreign minister Simon Coveney said there was no agreement reached yet. His comment affected the GBP negatively, but the overall positive expectation of the deal moves GBP/USD towards the resistance at 1.3254. If more negative comments on Brexit uncertainties are published, the support will be at 1.3182.

As a reaction to the Wall Street's collapse, the local share markets in Europe fell lower. EUR/USD pulled back earlier, testing the support at 1.1535 on a H4 chart. However, Trump comments brought weakness to the USD. This boosted the pair to move up on the daily chart. The resistance is at 1.1607 (50-day MA). Anyway, the worries about the market will probably play more significant role for the pair. If the EUR weakens, the support level is at 1.1446.