Dollar Moving Down waiting FOMC
The US Dollar slipped against most of its Rivals as markets totally discount a Fed rate increase of 0.25%. Meantime other major central bank heads have expressed a desire to normalize ultra-low interest rate policy as economies expand while inflation increases. US bond yields closed unchanged after climbing for 2 weeks. The Fed may reveal plans to shrink its massive US$ 4.5 trillion balance sheet. The risk is for a more hawkish Fed should they signal a December rate hike.
EUR/USD – managed to hold above 1.12, closing at 1.1210. Overnight high traded was at 1.1225 with the low recorded at 1.1185.. The resistance at 1.1230 should hold. Immediate support is at 1.1185. The strong finish is indicative of bullish sentiment. Market positioning is long as speculators increased their bullish bets on the Single currency. The risk then is for a lower EUR/USD. Sell Euro rallies.
GBP/USD – rallied to finish up at 1.2753 immediate resistance lies at 1.2770. There is good support at 1.2670. UK inflation continues to grind higher as PM May seeks to strengthen her government. The Bank of England is not expected to change policy at its meeting tomorrow. Markets will be looking for any clues as to the BOE’s thoughts on future policy in their monetary policy summary.
AUD/USD – consolidation continues. The Aussie closed at 0.7535 from 0.7540, little-changed from yesterday. NAB’s Business Confidence Index fell to 7 from the previous 13. However, the number is still robust. AUD/USD traded to a high of 0.7565 yesterday with a low recorded at 0.7524. Copper and other industrial metals prices dropped pushing the Aussie to close slightly lower. The Chinese data today may see the Aussie move but expect the ranges to remain intact. Likely range today… 0.7510-0.7560.
USD/CAD – extended its losses, slumping to close at 1.3245 from 1.3325 yesterday. Bank of Canada Governor Stephen Poloz said that the “bank’s 2015 rate cuts have largely done their work”. His hawkish comments added to that of Deputy Governor Wilkins yesterday. USD/CAD was sold to late February lows. Let’s not forget that the speculative market had increased their short Canadian Dollar bets to the highest total in over 8 years. There is immediate support at 1.3200. Resistance lies at 1.3320. Given the extreme market positioning in this currency, USD/CAD topside is limited and a move to 1.31 is possible.
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***Information contained in this news letter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making, but merely provides information from the market for its clients as additional information being made available as per the events occurring in the financial markets.
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