[B]Daily Fundamental Dose: 19-August-2016[/B]
Hello Traders,
Adding to the already prevailing US Dollar pessimism, mainly backed by dovish data-points, the greenback got another flop when minutes of July FOMC said the Fed policymakers want to see more economic improvement before announcing the much awaited rate-hike. The news provided noticeable strength to the USD Bears and ignored the better than forecast Jobless Claims and Philly Fed numbers which dragged the greenback to nearly two-month lows against EUR on Thursday. On the contrary, the Euro kept rallying towards north on counter-strength against US currency and comments from ECB minutes that market players shouldn’t see the Brexit forcing the central bank towards further mammoth monetary easing. Further, the GBP rallied with unexpected surge in UK Retail Sales while the AUD managed to extend its up-move on hawkish labor market details. Moreover, the NZD and JPY, together with the Gold held their gains intact with no major updates than the greenback weakness fueling the commodity basket and helps safe-haven demand. Additionally, the Crude prices rallied to July highs after decline in US inventories, together with present speculations supporting production-freeze talks, helped the energy vehicle.
As the market stands on the weekend-door, traders seem in a raw for profit-booking and giving some alternative moves than we have witnessed since the week-start. The same action got help from another round of Fed members’ comments that the 2016 rate-hike is inevitable. However, dearth of economic data-points, except Canadian Retail Sales & CPI, might restrict the USD favored traders.
Moving on, the market players are also in the state of dilemma where on the one hand Fed members keep favoring rate-hike in 2016 while FOMC minutes and recent US details are portraying something different. Hence, next week’s Jackson Hole meeting of global financial leaders will be closely observed where the Fed Chair’s speech will be examined in detail. Given the Fed Chair repeats what recent FOMC minutes said, chances of the USD plunge can’t be denied. Also, GDP releases from US & UK will gain market players’ attention to forecast immediate moves of the greenback and GBP respectively.
On a technical note, overbought RSI and a weekend profit-booking might drag the EURUSD to 1.1280 & 1.1250 support but an extended up-move beyond 1.1370 can quickly print 1.1410 and 1.1430 on charts. On the GBPUSD, chances of its pullback to 1.3050 & 1.2995 are higher with 1.3185 being immediate resistance while AUDUSD might hold recent downside around 0.7550 and can reverse to 0.7680 soon. Furthermore, Gold has 1360 and 1335 levels to watch and the Crude can comeback to 46.50 on overbought oscillators.
Have a nice trading-day and a great weekend….