US Dollar Outlook Talking Points:
- The US Dollar is closing in on a re-test of the Two-year-highs on the 98.32 degree on DXY.
- Yesterday’s FOMC minutes helped to maintain the bid within the US Dollar. While the Fed didn’t speak up price hikes on the earlier-month assembly, additionally they didn’t speak up cuts, speaking a ‘affected person’ technique at odds with market expectations which might be in search of a 25 foundation level price minimize within the second half of 2019.
- – DailyFX Forecasts are printed on quite a lot of currencies equivalent to Gold, the US Dollar or the Euro and can be found from the DailyFX Trading Guides web page. If you’re seeking to enhance your buying and selling method, try Traits of Successful Traders. And for those who’re in search of an introductory primer to the Forex market, try our New to FX Guide.
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US Dollar Drives Towards Two-Year Highs
The US Dollar has continued to rally after yesterday’s launch of FOMC minutes, with the foreign money eliciting an analogous response to the earlier-month price determination. At that assembly, the Fed was non-committal to future price cuts. Markets, alternatively, have come to count on a 25 foundation level minimize within the second half of the 12 months, so the Fed not speaking about this helped to convey a fast bid into the Greenback round Jerome Powell’s press convention on May 1st. That bullish theme within the US Dollar got here to a screeching halt simply a few days later across the launch of April Non-Farm Payrolls, and the USD continued to pullback over the following week.
Last Monday is when the US Dollar discovered help, and this came-in across the 97.00 deal with on DXY. Since then, it’s been a sample of energy as costs have pushed again up in the direction of the two-year-high on the 98.32 degree, assisted with yesterday’s launch of FOMC assembly minutes that echoed Jerome Powell’s feedback earlier this month. The Fed talked up a ‘affected person’ method of ready to see incoming information earlier than making a call on that subsequent price transfer.
US Dollar Four-Hour Price Chart
US Dollar Exposed to Deductive Drivers
The massive query is whether or not this weekend’s election outcomes convey out the bears within the Euro. EUR/USD worth motion hasn’t traded beneath the 1.1100 space in virtually two years, and to date in 2019, sellers have shied away from exams of this degree. Below that, the psychological 1.1000 degree lurks, and beneath that may be a zone of potential help that runs from 1.0814-1.0863.
EUR/USD Weekly Price Chart
GBP/USD Bears Continue to Push as Political Uncertainty Remains Around the UK
Yesterday was a tough day for PM Theresa May however, at this level, she nonetheless has but to surrender. This, nonetheless, will not be a ‘nice’ factor for the British Pound as sellers have continued to supply the foreign money decrease, pushing all the way down to recent five-month-lows this morning as a large swath of uncertainty envelops the Brexit theme. As checked out yesterday, GBP/USD is already flashing oversold readings on RSI through the Daily chart, and the four-hour chart has even begun to point divergence within the indicator, alluding to this being a troublesome spot to ascertain recent bearish publicity. But, sellers have nonetheless remained energetic, highlighting the potential for this theme to proceed even regardless of the aggressive run that’s been priced-in over the previous couple of weeks.
GBP/USD Daily Price Chart
Chart ready by James Stanley
To learn extra:
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— Written by James Stanley, Strategist for DailyFX.com
Contact and observe James on Twitter: @JStanleyFX