USD Turns Lower As Traders Await Jerome Powell’s Speech
The markets were rather quiet in the early part of the day today, despite plenty of talking heads keeping the newswires humming. The dollar climbed against most of its rivals early but reversed lower as the European session progressed as traders await FED Chair Jerome Powell’s speech to see if he would oppose the rise in US Treasuries that has pushed rates lower.
The New Zealand dollar turned higher today on smaller period charts, but it remains bearish on the larger timeframes since reversing lower in summer, as risk assets like commodity currencies fell against the US dollar, and it has been declining for more than three months, dipping below 0.58 in late October.
Early this month we saw a bullish reversal whcih sent the price to 0.60 and pierce that level briefly, but buyers couldn’t hold NZD/USD above there and the prcie slipped lower this week. ALthough the 200 SMA (purple) held as support on the H4 chart and we’re seeing a bounce from that moving average. We deicded to open a biy NZD/USD signal as the price was reversing higher and now this pair is approaching the take profit target.
This pair is rising on hopes that the FED will pause its tightening of monetary policy. This feeling was heightened by the FED’s dovish policy decision last week, as well as signs of a weakening employment market in the United States (US) following the bad performance of the economy. At the moment, the USD is under attack as trader await Powell’s speech later today, fearing he might sound dovish. Below is the unemploymnet claims report.
US Unemployment Claims for the Week Ending November 3
- Weekly initial jobless claims 217K vs 218K expected
- Prior initial claims 217K (revised to 220K)
- Continuing claims 1.834m vs 1.820m expected
- Prior continuing 1.818m
It’s difficult to get enthusiastic about this news since even if claims were 50K higher, they wouldn’t signal a recession. There will be no economic suffering till this reaches 300,000. However, the recent trend has been upward, so perhaps we’re on our way. One school of thinking on initial unemployment claims suggests paying more attention to revisions, as they reflect the underlying trend. Still, a 3K upgrade isn’t going to thrill me.
NZD/USD Live Chart
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