Forex Morning Briefing
Commentary: USD showing some strength. PE
Note: The importance of the FOMC meeting policy outcome Wednesday where a rate hike of 25 bpts is expected. Whether a rate hike and a possible rise in US yields subsequently are positive for USD strength or not will have to be seen, as a positive correlation between bond yields and currency strength has not worked for USD in the past 3-4 months and whether this particular rate hike can reinstate the prior correlation is something to watch in the coming weeks.
My preference is negative correlation to continue meaning for USD to dip.
The US Dollar (.DXY) Index at 90.303 moved up, breaking 1st resistance at 90.25-90.30. It marked a high of 90.45 Tuesday. There is room on the 3-Day candles and daily line for .DXY to rise to 91 in here.
EUR (Euro) at 1.2256) dipped after making a high near 1.2355 Tuesday and is not testing support at 1.225. There is Key support near 1.2200-1.2175, which if broken would be Bearish for the single currency medium term.
Note: The FOMC meeting later today may give us confirmation on direction.
USD/JPY at 106.49 might see a dip here, as the resistance is fairly strong just above, In the less preferred case of USD strength after the FOMC meeting Wednesday, USD/JPY could rise to resistance near 107 on the 3-Day line.
EUR/JPY at 130.51 is fading after testing 1st resistance on daily candle at 131.5. There is Key support now at 130.
Sterling (GBP) at 1.40 bounced after testing support at 1.38 last week. It may pause in its move if there is some USD strength after the FOMC meeting. But, in case USD does not strengthen, GBP testing resistance near 1.44 in the next 2 weeks.
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