Markets on Thursday: USD Tackles Resistance
Rowan Crosby • 1 min read
US Federal Reserve Chairman Jerome Powell headed to Congress for day two of his testimony. Yesterday, he was a little more optimistic which helped both the USD and equity markets. That bullish-outlook was a touch more subdued on Wednesday and a hint of dovish concerns crept in.
That saw the USD struggle to maintain the highs during the US session and we fell away ever so slightly.
That made for relatively range bound trading action in the majors. Although the biggest mover on the day was really the GBP/USD, after less than impressive inflation data weighed it down over the course of the day.
Oil had a big despite ironically posting a larger build than expected. We saw the same thing the day before with the API inventories and the official EIA figure confirmed our expectations. Oil is now back trading at $69.00 after testing $67.00 only days ago.
And Bitcoin continues to mount a comeback. Price ticked as high as $7,600 as the resurgent cryptocurrency managed to hold onto its gains.
The USD is at Resistance
The resistance level at 95.50 is now the level that we have to try and crack. The issue for the USD is that 95.50 is where we’ve seen the majority of the volume trade over the last few years.
Taking a look at a longer-term daily chart, you can see the high volume area at $95.50.
The next major area of high volume is $97.30. So with that in mind, I suspect it is the next obvious long-term level that price will seek out.
That’s not a short-term move and as we’ve seen it has taken a fair bit of work for the USD to get to 95.50 given the negative headlines of recent times.