The US dollar weakened even more from the past headlines. Donald Trump said that ump stated in an interview that he is not thrilled with the Fed hiking rates. He also said that Fed should do more to help him boost the economy. Europe and China of manipulating their own currencies – accused by Trump. We could expect for US dollar weakened even more in future, if we get some highlights.
EUR/USD rallied yesterday and during Asian session, breaking the 1.1482 resistance line and testing the 1.1537 resistance level. We could see the pair breaking the 1.1537 resistance line and aim for the 1.1623 resistance level. On the other side, we could see the pair breaking the 1.1482 support line.
USD found some support yesterday as the 10 year treasury yields rose, however remained soft. The rise of the yields stemmed from expectations that the Fed will maintain its 4 rate hike path in 2018 despite criticism by president Trump. Analysts stated that the US economy is in a very healthy state overall and that currently it is unimaginable that the Fed would stop raising interest rates. Should there be further headlines strengthening that scenario, we could see the USD getting further support.
USD/JPY rose yesterday breaking the 111.30 resistance line, correcting somewhat during today’s Asian session. We see the case for the pair to continue in a sideways movement today, maybe with some bullish tendencies. The pair could prove to be sensitive to any further rise of the US treasury yields as well as any tweets from president Trump regarding monetary policy. It also may prove sensitive to any announcements by the Bank of Japan regarding its QE program. Should the pair come under selling interest we could see it breaking the 110.75 support line while should it find extensive buying orders along its path, we could see it breaking the 111.30 resistance line, aiming for the 112.05 resistance hurdle.
The dollar rallied yesterday after Chairman Powell said the Fed will continue to slowly raise interest rates for now . Powell stated, the reason was to keep inflation near its target amid robust conditions in the U.S. labour market. Comments like the job market has strengthened and inflation has increased mostly due to gasoline and energy prices stood out. He also added unemployment was at it’s the lowest and that the US economy grew in a solid pace the first half of the year. With basically a revision of the positive economic outlook in the US the USD bulls were set free during the American session.
EUR/USD dropped during Powell testimony and landed very near our 1.1640 support level. Today, in the European morning the pair could follow up on sideways movement as the financial data to be released from the Euro-zone could be neutral for the common currency. However, in the American session the pair may prove to be sensitive to the US financial data to be released or Fed Chairman Powell testimony later on. Should the pair find extensive buying orders along its path we could see it rising and breaking the 1.17150 resistance line. Should it come under selling interest by the market, we could see the pair aiming for the 1.1640 support barrier.
At this point, a small comment must be made on Crude Oil, as the commodity has dropped approximately $5 in the past 7 days. The Trump Putin meeting plunged Oil prices as comments made from both presidents indicated a joint attempt to regulate Oil prices. Also the US considerations on waivers on countries importing Oil from Iran helped drop prices.