USD Fell Away Yesterday

Markets on Thursday: USD Falls, While Buying Continues in the Euro

Posted Thursday, June 14, 2018 by
Rowan Crosby • 2 min read

Markets have been flooded with news this week, from the North Korean/US Summit, the G7, CPI amongst many others. However, the real focus has always been on the Central Banks and that kicked off yesterday.

The US Federal Reserve hiked rates and that takes the official rate up to 2.0%. They also outlined that they are focused on four rate hikes this year. With the outlook for jobs and GDP growth continuing to improve by years end.

The attention now turns to the ECB, who are looking to wind up QE. At least, that’s what the headlines would have us believe. We’ve been let down before by Mario Draghi and the ECB, so we need to be a little cautious. But it does appear that this will be the meeting.

The Euro has been on the rise in recent weeks as a result of the speculation. And once again it was the strongest currency of the day. Normally we can look at a situation where we buy the rumour and sell the fact, but given the track record of the ECB I feel we’ll get a surge higher if we do in fact get an end date for QE.

This morning we’ll be waiting on Australia jobs data. Overall the numbers have been looking solid in Australia, however, we are a long way from having any pressure on rates.


USD Falters

With the FOMC really promoting their interest rate hikes, it came as no surprise that the USD actually weakened overall. Trade has really been choppy to say the least and it hasn’t been easy conditions for traders.

We are still stuck in a range between 93.30 and 94.00. In the short-term, I’m still a touch bearish as it looks like we have a bit of an upward channel. And that does fit with the head and shoulders we are seeing.

If we can take out either of our two levels that are boxing us in, then we might see some momentum which would be nice.

US Dollar Index (DXY)
US Dollar Index (DXY) – 240 min Chart.


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