The dollar is regaining strength and oil is rising due to geopolitical factors and markets awaiting the FOMC meeting today
The US Dollar has rallied quite nicely during the trading session on Tuesday, as we continue to find plenty of support against the Japanese yen. Recently, we have seen a lot of selling pressure, but quite frankly I think this pullback has been very good for the pair, as the ¥114.50 level of course has been massive resistance in the past. Pulling back to the 61.8% Fibonacci retracement level makes sense, and as you can see I have a gold box between the 50% and the 61.8% Fibonacci levels for a potential buying area.
The NY trading sessions start off with Canada's manufacturing sales report. This is followed by the building permits and housing starts data. Building permits are expected to rise by 1.28 million while housing starts are expected to rise at a slower pace of 1.21 million.
Later in the evening, the Fed will be releasing its meeting minutes from September. The minutes mark the monetary policy decision where officials hiked interest rates by 25 basis points. The Labor Department reported that US employers posted the most jobs in two decades in August as expectations around hiring continued to outpace while the US industrial pace picked up and the Federal Reserve said output by US factories, mines and utilities climbed in September despite the effects of Hurricane Florence.
Equity investors took their cue from the industrial production report which indicated inflation isn’t picking up, triggering another Goldilocks economy rally. But whatever signal convinces investors the Fed will not move interest rates up quicker than expected will be latched on to especially in the face of robust US data.
The American Petroleum Institute figures for the week ended October 12 showed an unexpected 2.1 million barrels per day decline in US crude oil inventories even as stocks at the Cushing, Oklahoma delivery point for NYMEX WTI futures increased by another 1.5 million barrels per day. But the headline did catch momentum speculators wrong-footed who were expecting another build.
Prices were also bolstered by the rising US stock market providing a welcome distraction from trade tensions and concerns about global growth as investors are back focusing on tighter global supply due to Iran sanctions. It’s widely expected that Iranian exports, which are already dropping will fall quite sharply from November onward, and even if the Saudis and other OPEC bodies have compensated the anticipated shortfall to some degree, there will undoubtedly be a near-term imbalance which will pressure prices.
EUR/USD – Still moving between the 1.1540 and 116.00 level. Immediate support still at 1.1540 followed by 1.1490. Looking forward to trading in a possible range today from 1.1520-1.1650
GBP/USD – Regain its upward move due to positive economic data and reached 1.3236 level as a high for yesterday .The immediate resistance for today at 1.3240 followed by 1.3275. Immediate support still can be found at 1.3085 followed by 1.3025.
USD/JPY – The pair still from the past 7 days ago still trading between 111.70 and 112.55, in the Asian session today the pair reach the level of 112.43 as a temporary high . The immediate resistance is still at 112.55 followed by 113.30. Immediate support still at 111.20 followed by 110.60.
AUD/USD – The Australian dollar is not moving in a good range in the past week till now , the pair is trading within a range of 0.7100 and 0.7150 . Immediate support still at 0.7025 with next support at 0.6980. The immediate resistance 0.7180 followed by 0.7280. Expected range today from 0.7100-0.7160.
USD/ZAR – The rand has continued to strengthen on the back of lower-than-expected US retail sales as well as a firmer Turkish lira, firming to a high of R14.28 to the greenback on Tuesday morning.
By 10:09, the rand was trading at R14.30/$.
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