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.
Trump screws Biden over before leaving
The US dollar has been dipping for the seventh day in a row, while the euro and the pound edged higher.
- Treasury Secretary Steven Mnuchin decided to end emergency pandemic lending programs at the Federal Reserve. Mnuchin asked the Fed to return unused funds till the end of the year. The dispute between the Treasury and the Fed is a quite rare deal. If the current emergency programs are removed, it will leave the economy in a fragile state for Biden’s board.
- US unemployment claims rose more than expected: 742 000 people filed for jobless benefits last week, while the forecast was 707 000.
- The EU and the UK may reach the Brexit deal next week, according to unofficial data. However, the real deadline may expand till December 31. That’s why the deal can be done any day. This uncertainty makes the pound more vulnerable to any news about Brexit.
- UK’s data is encouraging: retails sales, as well as public sector net borrowing, exceeded expectations.
- Japan’s Manufacturing PMI came out worse than the estimates, adding modest pressure on the yen.
- All eyes on Canadian retail sales at 15:30 MT time!
EUR/USD has approached the resistance of 1.1890, which it has failed to cross several times. Therefore, we can expect the pullback from it, but it shouldn’t be lower than Wednesday’s low of 1.1855. If it manages to break it, the way to the 50-period moving average of 1.1830 will be clear.
The British pound behaves as the euro’s twin. It has approached the key resistance of 1.3300, which it’s likely to fail to cross. The move below the 50-period moving average of 1.3220 will drive the pair lower to the next support of 1.3165.
XAU/USD has bounced off the support of $1 860. The long tails of the candlesticks below its bodies and higher highs mean that the momentum is bullish. So, we can assume the price can rise until it reaches the resistance of $1 882. If it manages to break it, it may jump to $1 900. Support levels are $1 860 and $1 850.
The Australian dollar is edging higher. Since it bounces off the 61.8% Fibonacci level of 0.7260, the doors towards the next 78.6% Fibo level of 0.7325 are open now. The move above it will drive the aussie to the psychological mark of 0.7400. Support levels are 0.7260 and 0.7225.
Follow Canada’s core retail sales at 15:30 MT time!
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
Australia will release employment change and an unemployment rate on Thursday, October 14, at 03:30 MT (GMT+3).
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).