Majors on Monday: Can the USD Claw its Way Back?
Rowan Crosby • 2 min read
While last week was only a short one, the majors all got moving. The big story of the week was really the USD and how it managed to fall to its lowest point in nearly two months.
The weakness was really led by Wednesday’s FOMC minutes that showed that some officials were concerned inflation would stay below the bank's target rate of 2%, for longer than expected.
Investors are almost locking in a rate hike in December, however, the drop in the dollar appears to be surrounding the uncertainty of more rate hikes in 2018.
The EUR/USD was another that kept on moving higher, and on Friday we tested the 1.1850 level. A key resistance level that has been holding up for a few months. From here we are now on track to take out 1.2000 if the momentum continues.
Changing Of the Guard
Fed governor Jerome Powell, who has been selected by President Donald Trump as the next Fed chairman, will appear before the Senate Banking Committee on Tuesday for his confirmation hearing. This will hopefully give investors some insight into how he plans on leading the Fed and will have some impact on the USD.
AUD/USD – The AUD is still weak and 0.7640 is a good spot to be a seller
EUR/USD – The Euro had a bullish breakout last week and we are now looking for an upside test of 1.2000.
USD/JPY – We’ve fallen away considerably, and 111.00 is the next key target.
NZD/USD – The Kiwi, has slowed its loses and is consolidating. Look for short opportunities.
USD/CAD -The CAD is getting ready to test key support on Monday.
USD/CHF – We have broken to the downside and have more room below before we hit the next support level.
GBP/USD – We are in an uptrend and looking to hold the current levels to confirm the breakout.
US Dollar Index (DXY) – The USD has fallen away sharply with the next support level at 92.60 very much in play.