Forex Signals US Session Brief, February 1 – Yellen Failed the USD
Skerdian Meta • 3 min read
Yesterday was Yellen’s last appearance as head of the FED. USD buyers were hoping for a last minute gift from Yellen, but it didn’t happen and we had some difficulties with our forex signals. Cryptocurrencies are not doing much better than the Buck and Bitcoin has broken below the $10,000 level.
Trump won this war with Yellen
No Free Lunch from Yellen for the USD
Janet Yellen said her last goodbyes as the head of the Federal Reserve yesterday. She’s not out of the office yet for a few more days, but this was the last FED meeting that Yellen directed.
The FED kept the interest rates unchanged yesterday, as expected. The US Dollar did gain about 100 pips after the meeting. It has returned most of the gains, apart from USD/JPY which is still running higher today. Although, that has more to do with the JPY, to be honest.
The Aussie and the Kiwi are also down today, but we can’t say that this is coming from the USD side. Yellen did leave a gift for Powell who will take her spot later this month. The odds for a rate hike in the next meeting, taking place in March, are near the top, so she has left a rate hike in the closet for Powell. At least, it takes the pressure off of him in making such a decision since he will be new at the job.
Looking at the broader price action the day after the FED meeting, it is obvious that the US Dollar can’t get its head above water. Yellen didn’t help US bulls, but I don’t blame her. There is a currency cold war going on and the US is winning it. The USD decline is all political.
Has the Market Sobered Up on Cryptocurrencies?
The cryptocurrency market is having another bad day. Most of the major cryptocurrencies are about 10% lower today. This is the fourth consequent day that altcoins are declining.
Looking at the larger timeframes, cryptocurrencies have been in a bearish trend over the last six weeks. This doesn’t look good. We’re used to seeing cryptocurrencies progress higher after every dip, but this dip is taking way too long.
Bitcoin has lost about half its value during this time and looks like today will be the day that it finally breaks below $10,000 for good. It has pierced this big level many times recently, but it never closed the day below it. Today seems like we might close below the $10,000 level, although, there’s still plenty of day left until it is over; we might see another reverse higher.
The big level looks pretty weak today
Trades in Sight
- This pair is following a strong downtrend
- The hourly chart is overbought
- The 100 SMA is providing resistance on the H1 chart
- The 20 SMA is providing resistance on the H4 chart
The 100 SMA has been providing resistance all day long
USD/CAD has been trading in a downtrend over the last two months. But since yesterday evening, the commodity Dollars have been in retracement mode. This has presented us with a few trading opportunities. We went long on NZD/USD a while ago. We might sell USD/CAD because the retrace looks complete. The 100 SMA has been providing resistance on the H1 chart since last night making a sell order looks tempting.
We have the US industrial production report coming up. Although, as I mentioned, the US Dollar is prone to political war on currencies now, so I doubt the economic numbers can alter the charts.