The US Dollar remained relatively stable against a number of its counterparts, however scored gains against the Yen and CHF. In general, upbeat Wall Street earnings announced, seem to have improved overall market risk sentiment, weakening safe havens. In other news, president Trump renewed his criticism on the Fed as he called the bank his “biggest threat”. The bank is to release today, the minutes of its last meeting and the market will be scrutinizing the document for clues of the bank’s intentions. Should there be a confirmation of the current rate hike path and prevailing hawkish comments, we could see the USD getting some further support.
USD/JPY rose yesterday breaking the 112.15 (S1) resistance level, now turned to support. The pair could continue to trade in a bullish market, should the positive sentiment for the USD continue and the release of the Fed’s minutes support the greenback. If the market continues to favour the pair’s long positions, we could see the pair breaking the 112.72 (R1) resistance line and aim for the 113.25(R2) resistance barrier. Should the bears take over, we could see the pair breaking the 112.15 (S1) support line and aim for the 111.63 (S2) support area.
GBP gains on favorable employment data.
The pound scored some gains yesterday, as some employment data released, for August, were better than expected. The most characteristic reading would be the average earnings growth rate which reached +3.1% yoy, breaking a 4 years + record, despite the unemployment change figure dropping. Analysts point out though, that the increased likelihood of not reaching a Brexit deal could be keeping the pound in check. Volatility for the pound could be rising again today, as the CPI rates for September will be released.
Cable rose yesterday, breaking the 1.3150 (S1) resistance line (now turned to support) as well as the 1.3215 (R1) resistance level for a short period of time, as it corrected and stabilised lower, later on. The pair could drop somewhat today as the UK CPI data forecasts, if realised, could weaken the pound and the release of the FOMC minutes, could provide some support for the USD. Should the pair come under the markets’ selling interest we could see it breaking the 1.3150 (S1) support line and aim for the 1.3080 (S2) support zone. Should the bulls take over once again, we could see the pair breaking the 1.3215 (R1) resistance line and aim for the 1.3285 (R2) resistance hurdle.
In today’s other economic highlights:
During the European session, we get the UK headline and Core CPI rates for September and Eurozone’s final release of the HICP rate for September. In the American session, we get the number of US Housing Starts for September and the EIA weekly crude oil inventories figure. Bear in mind that, the Fed is to release the minutes of FOMC’s last meeting, late in the American session. As for speakers, ECB’s Peter Praet, BoE’s Jonathan Cunliffe and Fed’s Lael Brainard will be speaking.
USD/JPY 4H
Support: 112.15 (S1), 111.63 (S2), 111.15 (S3)
Resistance: 112.72 (R1), 113.25 (R2), 113.95 (R3)
GBP/USD 4H
Support: 1.3150 (S1), 1.3080 (S2), 1.3025 (S3)
Resistance: 1.3215 (R1), 1.3285 (R2), 1.3360 (R3)
