We’ve been watching the USD ramp up quickly following the FOMC latest release indicating increased concern over inflation, on fears or expectations of a pickup in the pace of interest rate increases. Every new piece of inflation-related news now affects the dollar more than ever. Today’s personal income expenditures number, in-line with expectations, appears to offer nothing new for the forex market to grap on to, and jobless increases picking up further weakens the bullish case for rates (even if only for today!) so in the meantime technical trading dominates.
Forex chart of the day:
US Dollar Index – price has failed, so far, at the natural point of resistance leading out from the rising wedge earlier this year, and now a new down swing has started. Gold will probably be a beneficiary, as may Crude and therefore oil stocks, and currencies such as Euro, Yen and Pound are likely to get more lift against the USD.
USDJPY, our last chart of the day where we pointed out the test of range top underway, has failed so far. First targets below marked – traders should move to break even stops soon.
Both the Euro and Pound are bouncing up to resistance, and as a result I doubt this move down in the USD will be highly directional, but just in case I plan to exploit the start of the move with trades in Forex, Gold and Oil and get to break even stops at the earliest possible opportunity.
05.03.31 09:08 #