(Jing Ren – Orbex)
USD/JPY seeks to recover
The US dollar consolidates over growing expectations of a slower pace of tightening by the Fed. On the daily chart, the greenback is above the 30-day moving average and may continue to attract trend followers. The latest bounce came under pressure in the supply zone around 149.00, which means that the price action is still in a consolidation mode. 146.00 is the first support as the RSI ventures into oversold territory. Further down, 145.00 is an important level and its breach could trigger a deeper correction towards 143.00.
AUD/USD hits resistance
The Australian dollar softened after the RBA stuck with a mere 25 basis point rate hike. The pair has found strong support over 0.6200. Three consecutive failures to break lower by the bears indicate that the path of least resistance could be up. A series of higher lows contributes to the mounting buying pressure. 0.6370 is a fresh support and 0.6300 the bulls’ second layer of defence. October’s high and daily resistance 0.6530 is a key hurdle. Its breach would cause the short side to cover and trigger an extended rally towards 0.6660.
NZD/USD follows rising trend line
The New Zealand dollar slid after the Q3 unemployment rate fell short of expectations. A rising trend line indicates a strong bullish bias as the kiwi continues to recover. A break above the double top and daily resistance at 0.5790 prompted sellers to cover, easing the downward pressure. The rally then accelerated above 0.5880 after a brief consolidation with 0.5970 as the next target. The RSI’s overbought condition may cause a limited pullback. Buying interests could be expected near 0.5800 over the trend line.
EUR/USD: In range trading mode with all eyes on Fed
(Vasilis Tsaprounis – TopFX)
The European currency is trading just below its 0.99 level in a narrow trading range as investors shy away from taking major positions ahead of the Fed’s crucial rate hike announcement late in the evening.
The 75 basis point increase decision is fully expected and the possibility of any surprise is extremely small.
For this reason, the greatest interest is gathered by any comments from Fed’s President , Jerome Powell, regarding the course of the American economy , the risks involved and the future intentions of the Federal Central Bank regarding the next increases.
Τhe macro economic figures so far remain in balance have not disappointed and for this reason we have seen the growth rates of the US economy remain at positive rates while recently we also had a significant reaction in the stock markets with the barometer index S&P marking values at 3900 units having significantly reacting from the 3,490 on October 13.
The picture remains cloudy from the EU side as well, with several central bank officials trying to send messages about the Ecb’s intentions, which are not clear. Also the possibility of a recession in the European economy remains as the President of the European Central Bank, Christine Lagarde, said yesterday.
Stock markets showed some first major signs of fatigue yesterday and the possibility of the latest rally continuing looks very low.
In an environment where some significant pressures will return to the International stock markets, the US currency is expected to benefit as it traditionally functions as a safe haven currency.
The calendar is poor by EU macroeconomic news , consequently interest shifts to midday with the US jobs data and then the Fed decision will monopolize interest.
Investors’ wait-and-see attitude towards major announcements is the most expected, while will be y difficult for the European currency to return to an upward momentum.