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.
What awaits USD after Fed report on February 11?
- The US dollar continues dipping for the fifth day in a row. Stock indices such as Nasdaq and S&P 500 are trading sideways near all-time highs. Meanwhile, Biden is making progress on finalizing the stimulus deal.
- The US consumer price index came out along with expectations yesterday: 0.3%. However, the US Core CPI, which excludes food and energy, was worse than the market estimate: 0.0% vs the expected 0.2%. By the way, the CPI index accounts for a majority of overall inflation, that’s why it’s a significant indicator.
- Fed’s Chair Jerome Powell held a meeting yesterday. He claimed that the Fed wouldn’t raise rates till the employment reaches the target level and inflation grows to 2%. The dovish Fed and the weak US inflation data pressed the dollar down.
- Crude oil inventories encouraged investors with the 6.6 million barrels drop in inventories, while analysts anticipated they would fall by 900 000 barrels. It should be the catalyst for oil to rally up further.
- The earnings season goes on. Today PepsiCo and Disney will publish their earnings reports at 13:00 MT time and 23:30 MT time (GMT+2), respectively. The estimate for PepsiCo is $1.46 per share, while Disney is expected to release the $0.33 drop per share. If the actual results are greater than the market estimate, the stock will rise. Otherwise – drop.
EUR/USD stopped ahead of the 200-period moving average (MA) at 1.2150. Since the USD is weak, the pair is likely to break through this resistance and jumps to the high of January 22 at 1.2190. In the opposite scenario, the move below the 100-period MA at 1.2090 will drive the pair to the next support of 1.2050.
GBP/USD has failed to cross the resistance of 1.3850. If it manages to do so, the way up to the next round number of 1.3900 will be clear. Support levels are 1.3800 and 1.3730.
USD/JPY is moving in an ascending channel in a short term. Thus, it’s likely to bounce off the 100-day MA at 104.50. But at the same time, the US dollar is weak, so a drop below 104.50 is possible too. The next support will be at the 50-day MA at 104.00. Resistance levels are 105.00 and 105.60.
NZD/USD has formed a symmetrical triangle. Therefore, traders are waiting for the breakout, which will define the further movement. If it breaks above 0.7250, it may surge to the multi-year high of 0.7300. The move below the 50-day MA at 0.7150, the doors towards the next support at 0.7100 will be open.
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).