The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
Risk-off sentiment pushes safe-havens up
The comment by the US President Donald Trump resulted in the sell-off of the risk-weighted currencies in the market today and an increase of inflows into the safe-haven assets. Of course, those actions were provoked by Trump's suggestion that the US-China trade deal seems unlikely to be reached until the next year's elections.
- USD/JPY has slid below the 200-period SMA and managed to stick below the ascending trendline on H4. If bulls want to push the pair within the uptrend, they will need gear to test the 108.8 level (200-period SMA). If this level is broken, buyers will push the pair higher to the 109.01 level. The key targets from the downside lie at 108.65 and 108.5.
USD/CHF has broken the ascending trendline on H4 and has been moving towards November’s support at 0.9872. After the breakout, bears need to pay attention to the 0.9850 level. As the RSI and stochastic oscillators are oversold, we may suggest that bulls may try to push the pair above the uptrend and test the 0.9896 level. The breakout of this level may push the pair higher to 0.9909.
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
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This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.