The USD was one of the Forex Crosses under a lot of pressure yesterday morning before the CPI numbers came out in the US and were a bit softer than the forecast. One of the members of the Fed, Dudley, then came out and suggested that the US should be hiking rates. The market is very uncertain and with the FOMC meeting tonight so Dean is likely to be sitting on the side line.
Dean's Daily FX Update – 17 August 2016
In the EURUSD, the price action in this forex pair suggests we could see some more dollar strength and a follow on from yesterday afternoon. A classic pin bar candle formation with the EMAs, MACD and stochastics all turning south.
Dudley’s comments also put the brakes on the ascension of the AUDUSD where it failed to reach the recent high of 0.7764. The next possible target is the previous resistance and now support at 0.7626.
In the Kiwi, we saw some very similar action in this FX pair. If you did take the NZDUSD trade, then we may well see a test of the support level 0.7234 and a possibility of a break of this level. Dean’s preference is to be against some of these commodity currencies which include the USDCAD.
The Yen had a test of the 100 level yesterday morning but bounced shortly after the comments. It confirmed that the 100 level is currently good support and with the BOJ always waiting in the wings, it will be an important level to watch.
The Rand failed to break the 13.25 level for about the 10th time this month alone. The more attempts and fails the stronger the support becomes.
If you are trading this evening, please be very careful when the minutes of the FOMC meeting are released. We saw the reaction to Dudley’s comments yesterday and we could see more of the same.
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