GBPAUD Ascending Trend Line (Dec 13, 2017)
GBPAUD continues to trend higher, moving above an ascending trend line connecting the lows since early September. Price looks ready for another trend line test soon and this support area lines up with a former resistance around 1.7500.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This means that the uptrend is more likely to continue than to reverse. The 200 SMA is just slightly below the trend line, adding another layer of support in the event of a larger dip.
Stochastic is already indicating oversold conditions to show that sellers are exhausted. The oscillator has yet to pull higher to reflect a pickup in bullish pressure that could allow a bounce to happen. A bullish divergence can also be seen as price made higher lows while stochastic had lower lows.
UK data has turned out stronger than expected so far, with headline CPI up from 3.0% to 3.1% instead of holding steady as expected and core CPI steady at 2.7%. PPI was also stronger than expected but RPI and HPI fell short.
Jobs data is due next and a smaller gain of 0.4K claimants is eyed compared to the earlier 1.1K increase. Also, the average earnings index is projected to advance from 2.2% to 2.5% to reflect stronger wage growth and more upside inflationary pressure.
This could set up for an upbeat BOE statement later in the week, even as the central bank is widely expected to keep rates on hold. As for the Aussie, rising gold prices are propping it up but the upcoming jobs report could still pose an event risk. An increase of 18.1K in hiring is eyed, much larger than the earlier 3.7K gain.
By Kate Curtis from Trader’s Way
EURUSD Descending Channel (Dec 14, 2017)
EURUSD is trending lower and moving inside a descending channel on its 1-hour time frame. Price is testing resistance after a sharp rally, so either a bounce or break could be due.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside, which means that the selloff is likely to continue. The channel resistance also lines up with the 50% retracement level.
Stochastic is indicating overbought conditions and is turning lower, reflecting a return in selling pressure. However, the gap between the moving averages is narrowing to suggest a potential return in bullish momentum. A break past 1.1850 could be enough to signal that a reversal is underway.
The FOMC hiked interest rates by 0.25% as expected but Yellen reiterated her cautious inflation outlook and also warned that the tax cuts could lead to a mere short-term boost rather than a long-term one. Upgrades were seen for most of the growth and jobs figures in this year and the next couple of ones, but inflation estimates were mostly unchanged.
As for the euro, the ECB decision today could prove to be a huge event risk as traders are now waiting for clues on a rate hike. Medium-tier data from the euro zone has been mixed since the last decision but inflation has ticked higher.
US retail sales figures are also lined up today, with the headline figure slated to show a 0.3% gain and the core reading likely to show a much stronger 0.6% increase. Higher than expected consumer spending data could reinforce positive growth expectations and more rate hikes next year.
By Kate Curtis from Trader’s Way
GBPUSD Channel Resistance (Dec 15, 2017)
GBPUSD is trending lower and moving inside a descending channel on its 1-hour time frame. Price is currently testing the resistance and could be due for a drop to support soon.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. In that case, price could drop to the 1.3300 handle or lower.
Stochastic is still heading north to show that a bit of bullish momentum is present but the oscillator is also nearing overbought levels to signal rally exhaustion. Turning lower could confirm that bearish pressure is returning.
The BOE kept monetary policy unchanged in this week’s statement as expected. Policymakers voted unanimously to keep interest rates and asset purchases on hold. The central bank also cited Brexit as a risk to their economic outlook.
As for the dollar, the currency has been able to hold its ground thanks to upbeat data. Headline retail sales rose 0.8% versus the estimated 0.3% gain while the core reading posted a 1.0% jump versus the estimated 0.6% increase.
Only the BOE quarterly bulletin and a speech by MPC member Haldane are lined up from the UK today while the US has industrial production and capacity utilization numbers due. The Empire State manufacturing index is also due today.
By Kate Curtis from Trader’s Way
EURGBP Channel Resistance (Dec 18, 2017)
EURGBP has been trending lower on its 1-hour time frame, trading inside a new descending channel pattern. Price is currently testing the resistance and could be due for a drop to support.
The resistance lines up with the 50% Fibonacci retracement level on the latest swing high and low, as well as an area of interest or previous support and resistance. This is also in line with the moving averages.
Speaking of moving averages, the 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. This suggests that the selloff is more likely to resume than to reverse. Stochastic hasn’t quite reached overbought conditions yet but is already turning lower to indicate a pickup in selling pressure.
The euro was in a weak spot last week after the ECB refrained from dropping more hawkish hints, despite upgrading their growth forecasts. Prior to this, a few medium-tier reports from its top economies printed weaker than expected results, so bulls might be worrying about a slowdown as well.
Meanwhile, the BOE wasn’t as hawkish either, even though top-tier UK data from earlier in the week turned out mostly stronger than expected. The MPC voted unanimously to keep rates and asset purchases on hold for the time being.
Up ahead, final CPI readings from the euro zone are due today, ahead of the German Ifo business climate index tomorrow. UK current account balance is due on Thursday and there are no other major reports so traders could pay closer attention to Brexit updates.
By Kate Curtis from Trader’s Way
GBPUSD Channel Top (Dec 19, 2017)
GBPUSD continues to trend lower in its descending channel on the 1-hour time frame. Price just bounced off support recently and is finding a ceiling at the channel resistance around the 1.3400 handle once more.
Stochastic is on the move down to confirm that selling pressure is in play. The 100 SMA is also below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the selloff is more likely to continue than to reverse.
However, the gap between the moving averages has narrowed to indicate weaker selling momentum. If an upward crossover materializes, bullish momentum could return and lead to a break past the channel resistance.
The US dollar is enjoying strong support from optimism surrounding tax reform as lawmakers are scheduled to make their final vote likely today. If all goes well, US President Trump can be able to sign the bill into law by the end of the week to mark the first major legislative victory for the administration.
US equities are already trading at record highs in anticipation of a positive outcome. Several analysts have noted that this might merely lead to a short-term boost to growth rather than a long-term one, but the fact remains that it would likely keep business activity and consumer spending elevated early next year if the bill is approved.
Meanwhile, the pound has lost a bit of ground last week on a relatively cautious BOE statement. Policymakers voted unanimously to keep rates and asset purchases unchanged, although a number of top-tier reports turned out strong. Brexit remains a risk for businesses even as a deal has been made.
By Kate Curtis from Trader’s Way
EURAUD Neckline Retest (Dec 20, 2017)
EURAUD previously broke below the neckline of its head and shoulders pattern on the 1-hour time frame to signal a selloff. Price found support around the 1.5340 area and is now pulling back to the broken support near the 1.5500 handle.
Applying the Fib tool on the latest swing high and low shows that this area of interest is between the 38.2% and 50% retracement levels that might keep gains in check. However, the 100 SMA is still above the longer-term 200 SMA to show that the path of least resistance is to the upside.
Stochastic is moving up to show that buyers have the upper hand but the oscillator is dipping into overbought territory to suggest rally exhaustion. Turning lower could draw more selling pressure in and allow the 200 SMA to keep holding as dynamic resistance around the 38.2% Fib.
The euro got a boost from hawkish ECB remarks and news that Germany will be selling more bonds next year. This drove yields higher in the euro region, allowing the shared currency to benefit as well. Data was actually weaker than expected as the German Ifo business climate index fell from 117.6 to 117.2 versus expectations of it remaining unchanged.
Meanwhile, the Aussie is drawing support from the RBA’s less dovish stance and the pickup in risk-taking. Even higher gold prices during risk-off days have been able to prop up the correlated AUD. There are no other reports lined up from Australia for the rest of the week, though, so risk sentiment could be the main driving factor.
German PPI and euro zone current account balance are up for release today and stronger than expected data could remind traders of the upgraded forecasts by the central bank. German GfK consumer climate data and French consumer spending numbers are due on Friday.
By Kate Curtis from Trader’s Way
USDCAD Range Resistance (Dec 21, 2017)
USDCAD once again bounced off the top of its range on the 4-hour time frame and could be due for a move back down to support at 1.2675. Stochastic is heading south to show that sellers are on top of their game, but the oscillator is also dipping into oversold territory to reflect exhaustion.
The 100 SMA is above the longer-term 200 SMA also, so the path of least resistance is still to the upside. This means that an upside break from the resistance around 1.2900 is still a possibility. The 100 SMA could also hold as near-term dynamic support while the 200 SMA lines up with the area of interest at the middle of the range.
An upside break could lead to a climb of around 225 pips or the same height as the chart formation. Similarly a downside break on a strong return of selling pressure could lead to a drop of the same height.
The US government is on its way to enact tax reform, which is seen to provide a strong boost to business activity and overall growth in the coming months. This also marks the first major legislative victory of the Trump administration, reinforcing confidence in US economic standing.
Canada has its CPI and retail sales reports lined up later today and strong data could keep traders hopeful about a BOC hike sometime next year. On the other hand, downbeat results could remind market watchers that the central bank is treating future policy action with more caution this time.
By Kate Curtis from Trader’s Way
EURJPY Resistance Retest (Dec 22, 2017)
EURJPY recently broke to the upside of its descending channel visible on its 4-hour time frame. Price rallied close to the 135.00 handle before making a pullback and using the Fib tool shows the nearby support levels.
In particular, the 38.2% Fib is closest to the broken channel resistance that might now hold as support around 134.00. A bounce off this level could take EURJPY back up to the swing high and beyond.
The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. This means that the rally is more likely to continue than to reverse. However, stochastic is just turning down from overbought levels to show a pickup in selling pressure.
The BOJ kept interest rates on hold as expected in their latest policy statement. Traders seemed disappointed that Governor Kuroda didn’t follow through on its previous remarks on “reversal rate” or the point at which aggressive stimulus might be doing more harm than good.
Meanwhile, the euro got an earlier boost on reports that Germany will be issuing more bonds next year. This drove prices down and yields up across the euro zone, allowing the shared currency to benefit.
German GfK consumer climate and French consumer spending figures are due next, and strong results could reinforce hawkish ECB expectations. There are no major reports due from Japan but the yen appears to be getting weighed down by bond yields and the dollar’s rallies.
By Kate Curtis from Trader’s Way
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GBPUSD Symmetrical Triangle (Dec 27, 2017)
GBPUSD has formed lower highs and higher lows recently, creating a symmetrical triangle pattern on its 1-hour time frame. Price is approaching the peak of the formation so a breakout could take place soon. The chart pattern spans around 200 pips so the resulting breakout could be of the same height.
The moving averages are oscillating to reflect consolidation but the 100 SMA is currently below the longer-term 200 SMA to show that the path of least resistance is to the downside. Stochastic is also on the move down from the overbought region to signal a pickup in selling pressure.
The US government just signed the tax reform package, which is expected to be positive for business investment, consumer spending, and overall growth. Meanwhile, the EU also signed off on Brexit directives that would include a transition period until the end of 2020.
With that, both currencies are able to stay strong on a more positive outlook for the year ahead. The lack of other market releases for the week could also keep the consolidation in play.
Only the CB consumer confidence index and the pending home sales report are due from the US today, and both are expected to show strong gains. For one, the US housing sector has been on a good run for the past month while optimism could pick up in reaction to tax reform.
By Kate Curtis from Trader’s Way
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USDCAD Triple Top Break (Dec 28, 2017)
USDCAD was previously trading inside a rectangle pattern, which turned out to be a triple top reversal formation when price broke to the downside. The chart pattern is approximately 250 pips tall, so the resulting selloff could be of the same height.
Stochastic is already indicating oversold conditions, though, which means that sellers need to take a break and let buyers take over. If so, a pullback to the broken support around 1.2650 minor psychological level could be seen before the downtrend resumes.
The 100 SMA is still above the longer-term 200 SMA, so the path of least resistance is to the upside. However, the gap between the moving averages has narrowed, so a downward crossover might be possible soon.
US data turned out mixed this week, as pending home sales posted a higher than expected 0.2% gain while the CB consumer confidence reading fell short of estimates. The index slipped from 128.6 to 122.1 versus the estimated 128.2 figure to reflect weaker optimism.
Meanwhile, the Loonie drew a boost from a crude oil rally following news that a pipeline in Libya has been shut down. This could lead to lower output from the OPEC member nation, which has already seen plenty of dips owing to the conflict in the area.
US crude oil inventories data are up for release next and a draw of 3.9 million barrels is eyed. This would be less than the earlier draw of 6.5 million barrels but a reduction nonetheless.
By Kate Curtis from Trader’s Way
AUDNZD Channel Resistance (Dec 29, 2017)
AUDNZD has been trending lower, moving inside a descending channel on its 4-hour time frame. Price is currently testing the resistance and could be due for a drop to support.
The 100 SMA is below the longer-term 200 SMA, confirming that the path of least resistance is to the downside. In addition, the longer-term 200 SMA coincides with the channel resistance to keep gains in check.
Stochastic is on its way down to show that selling pressure is present. This could be enough to take AUDNZD back to the channel support at the 1.8000 major psychological level.
Earlier today, Australia released a stronger than expected private sector credit figure of 0.5% versus the estimated 0.4% increase. There are no other reports due from Australia today, so market sentiment could stay in play.
As for New Zealand, there were no major reports out this week but the currency has been reeling from generally weaker dairy prices in the latest auctions. Still, the Kiwi was able to draw a boost from the announcement of the new RBNZ head.
Looking ahead, the potential rate differential between the two nations can come into play as traders adjust their policy biases. The RBA has shifted to a less dovish stance in their latest decision while the RBNZ has more or less maintained its neutral bias.
By Kate Curtis from Trader’s Way
EURAUD Channel Pullback
EURAUD has been trending lower on its 4-hour time frame since breaking below the neckline of a head and shoulders pattern. Price has bounced off support and is now nearing a test of the resistance around the 1.5400 levels.
Applying the Fib tool on the latest swing high and low shows that the 61.8% level lines up with the channel resistance and could be enough to keep gains in check. In that case, the pair could fall back to the channel support at 1.5250 or the swing low closer to 1.5300.
The 100 SMA has crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This suggests that the selloff is more likely to resume than to reverse. Also, stochastic has reached the overbought area to signal weakening bullish momentum.
European banks are set to reopen today and markets will resume trading, which would mean a return in volatility for the shared currency. Medium-tier reports namely Spanish and Italian manufacturing PMI, as well as the final manufacturing PMI readings from Germany and France, are up for release today.
As for the Aussie, there are still no major reports lined up for today but China has its Caixin manufacturing PMI due. Analysts expect a dip from 50.8 to 50.7 to reflect a slightly slower pace of expansion, but a stronger than expected read could keep the Australian currency propped up.
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Later in the week, euro zone economies will be printing their final services PMI figures while China has its Caixin non-manufacturing PMI due. Australia’s trade balance is lined up for Friday, along with the euro zone flash CPI readings.
By Kate Curtis from Trader’s Way
USDJPY Triangle Forming (Jan 03, 2018)
USDJPY has formed lower highs and found support at the 112.00 area, creating what might be a descending triangle pattern. Price is currently testing support and might be due for a bounce back to resistance if it holds.
Stochastic is pointing up to show that buyers are in control of price action, likely allowing the floor to keep losses in check. However, the 100 SMA has recently crossed below the longer-term 200 SMA to signal that the path of least resistance is to the downside.
The dollar was off to a weak start for the year even with a strong showing from equities. Doubts about the Fed tightening pace and another round of jitters from North Korea have prevented bulls from charging.
Meanwhile, the yen seems to be pricing in a potential shift in BOJ policy bias. Late last year, Governor Kuroda spoke of a ‘reversal rate’ or the point in which aggressive stimulus could do more damage than good. Although the latest BOJ decision did not contain much hawkish hints, traders continue to stay on the lookout for potential changes.
Japanese banks are still closed for the holiday today, so there are no major reports lined up from Japan. The US has its ISM manufacturing PMI lined up and analysts are expecting to see a dip from 58.2 to 58.1 to reflect a slower pace of expansion. Of particular interest would be the jobs component as this would serve as a clue for the NFP turnout.
Also due today are the FOMC meeting minutes for December, which might contain more insight on how the central bank could adjust policy in the year ahead. Note that economic projections were revised then and it would be interesting to see the divide between hawks and doves among policymakers.
By Kate Curtis from Trader’s Way
GBPUSD Ascending Trend Line (Jan 04, 2018)
GBPUSD is trending higher on its 4-hour chart and looks prime for a pullback to the ascending trend line. Applying the Fib tool on the latest swing low and high shows that this lines up with the 61.8% retracement level around the 1.3450 minor psychological mark.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, these moving averages are close to the trend line support, adding to its strength as a floor.
Stochastic is on the move down to indicate that sellers have the upper hand for now, which suggests that the correction could go on for a while. Once the oscillator hits oversold conditions and turns back up, buyers could return.
UK economic data has actually been downbeat so far this week, with both the manufacturing and construction PMIs falling short of consensus. The former fell from 58.2 to 56.3 while the latter slipped from 53.1 to 52.2. The services PMI is due next and an improvement from 53.8 to 54.1 is eyed.
Meanwhile, the dollar has managed to shake off its downbeat start for the year when the FOMC minutes confirmed that gradual rate hikes are in the cards. As in previous meetings, policymakers expressed concerns about inflation, but several cited that the strength in the jobs market could buoy price levels higher.
The NFP report could also be an event risk for the dollar as a weaker than expected read could once again undermine Fed rate hike hopes. The jobs component of the ISM manufacturing PMI showed a decline for December and traders are waiting on today’s ADP employment change data next. Analysts are expecting to see a climb from 190K to 191K.
By Kate Curtis from Trader’s Way
EURGBP Channel Resistance (Jan 05, 2018)
EURGBP is trending lower in a shallow descending channel visible on its 4-hour chart. Price is approaching the channel resistance at the .8950 minor psychological level and might be due for a bounce.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. This means that the downtrend is more likely to resume than to reverse or that the top of the channel would probably keep gains in check. However, the gap between the moving averages is narrowing to suggest a potential upward crossover or pickup in bullish momentum.
Stochastic is pointing down from the overbought region, though, so sellers could still pick up their pace. In that case, EURGBP could slide back down to support at the .8700 handle.
Economic data from the UK turned out stronger than expected as the services PMI rose from 53.8 to 54.2, a notch higher than the 54.1 consensus. Euro zone medium-tier reports also printed a few higher than expected figures as well.
German retail sales, French preliminary CPI, and the region’s flash CPI readings are up for release today. Another round of upbeat results could continue to stoke expectations of ECB rate hikes later this year, following their taper plans this month.
There are no major reports due from the UK for the rest of the day, so pound price action could take its cue from other headlines, such as those related to Brexit.
By Kate Curtis from Trader’s Way
USDJPY Triangle Resistance (Jan 09, 2018)
USDJPY has formed lower highs and found support at the 112.00 major psychological level, creating a descending triangle pattern on its 4-hour time frame. Price bounced off the bottom to make another test of resistance, which appears to be keeping gains in check for now.
The 100 SMA is above the longer-term 200 SMA ,though, which means that the path of least resistance is to the upside. This suggests that a break higher could be possible, sending price up by around 150 pips or the same height as the chart formation.
Stochastic is on its way down, signaling that sellers could regain the upper hand. If so, USDJPY could still make its way back down to the triangle support and keep trading sideways.
The dollar caught a bid against its peers when the consumer credit report posted a stronger than expected result. Credit card spending leading up to the Thanksgiving holidays buoyed debt up from $20.5 billion to $28 billion in November while auto and student loans also ticked higher.
The S&P and Nasdaq continued their push for another round of record highs but the Dow closed in the red. FOMC members Bostic and Williams shared their views on the economy and warned of potentially weaker inflation weighing on rate hike prospects.
Only medium-tier reports such as the NFIB Small Business index and JOLTS job openings data are due from the US today. Japan just printed its average cash earnings report and showed a stronger than expected 0.9% gain versus the 0.6% consensus. Japanese consumer confidence data is due next and a gain from 44.9 to 45.1 is eyed.
By Kate Curtis from Trader’s Way
Another USDJPY Triangle Bounce (Jan 10, 2018)
USDJPY is still trading inside its descending triangle pattern and has just bounced off the resistance previously highlighted. Price is now making its way back to support at the 112.00 major psychological level for another test.
The 100 SMA is above the longer-term 200 SMA on the 4-hour time frame, so the path of least resistance is to the upside. This means that a bounce is more likely to happen than a breakdown. Still, a breach of support could lead to a 150-pip drop or the same height as the chart formation.
Stochastic is heading south to show that sellers are on top of their game, but the oscillator is dipping into oversold territory to indicate bearish exhaustion. Turning higher could draw buyers back in and lead to a move up to the triangle resistance near the 113.00 mark.
The BOJ recently surprised the markets by tapering its bond purchases, leading many to believe that the central bank is shifting to a less dovish stance. Weaker than expected data from the US also weighed on the dollar later in the day, but the US currency is able to draw some support from rising equities and bond yields.
Data from Japan came in mixed, with average cash earnings up 0.9% versus the estimated 0.6% uptick and the consumer confidence figure slipping from 44.9 to 44.7 instead of improving to 45.1. US JOLTS job openings and NFIB Small Business Index both disappointed.
Up ahead, US import prices and final wholesale inventories data are due. Traders are likely to keep close tabs on bond yields and stock market performance to gauge if dollar strength can be sustained.
By Kate Curtis from Trader’s Way
EURAUD Countertrend Play (Jan 11, 2018)
EURAUD has been trading in a descending channel pattern on its 4-hour time frame and has recently bounced off the resistance. Price is also breaching the middle of the channel to show enough downside momentum to reach the bottom.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside, which means that the selloff could carry on. Stochastic is turning back down as well, so price could follow suit.
However, the channel support might keep near-term losses in check and trigger another bounce to the resistance. A long opportunity arises but could be risky since it would run counter to the trend.
Australia just reported stronger than expected retail sales growth of 1.2% versus the 0.4% forecast and the earlier 0.5% gain. Earlier in the week, Australia’s building approvals also impressed with a 11.7% jump versus the estimated 0.9% drop.
Data from China last week has also been positive for the Aussie, as gains in the manufacturing and non-manufacturing PMIs spurred expectations of stronger commodities demand. Chinese trade balance is due on Friday and a wider surplus is eyed.
Meanwhile, the euro has tumbled on weaker European equities performance as risk aversion took hold. Interestingly enough, this has been positive for the Aussie as it took part in gold rallies.
[I]By Kate Curtis from [URL=“https://www.tradersway.com/”]Trader’s Way[/URL][/I]
USDCAD Support Turned Resistance (Jan 12, 2018)
USDCAD recently broke through the floor around the 1.2650 minor psychological mark then fell to a low of 1.2362. Price is showing signs of a pullback from its drop and sellers may be waiting at the nearby resistance levels.
Applying the Fib tool on its latest swing high and low shows that the 50% to 61.8% levels are close to the broken support, which might now hold as resistance. The 100 SMA is also around this area and is below the longer-term 200 SMA to signal that the path of least resistance is to the downside.
Stochastic is already turning lower to indicate a pickup in selling pressure. This suggests that the current barrier around the 38.2% Fib might be enough to keep gains in check and push the pair back to the swing low or lower.
US PPI turned out weaker than expected and weighed heavily on the dollar as this spurred downbeat expectations for CPI. Recall that policymakers have been stressing the weaker inflation outlook as a potential reason to slow their pace of tightening.
US retail sales are also due later today and the headline figure could show a 0.5% uptick. The core version of the report is expected to show a 0.3% gain but there could be a chance for an upside surprise as holiday sales have been strong.
Meanwhile, the Canadian dollar drew some support from rising crude oil prices on the heels of lower US stockpiles and production. Upbeat data from China has also supported demand expectations, which is also positive for the commodity and risk-taking.
[I]By Kate Curtis from [URL=“https://www.tradersway.com/”]Trader’s Way[/URL][/I]
USDJPY Broken Support Retest (Jan 16, 2018)
USDJPY recently fell through support at the 112.00 major psychological level and looks ready for a pullback to this area of interest. Applying the Fib tool on the latest swing high and low shows that the 61.8% level is close to this broken support, which might now hold as resistance.
Stochastic is pulling up from the oversold region to indicate a return in buying pressure. However, a shallow pullback to the 38.2% Fib might be enough to let the selloff resume.
The 100 SMA is crossing below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the downtrend is more likely to continue than to reverse.
The dollar has been on very weak footing despite a few upside data surprises. Banks were closed on a holiday yesterday, so the usual stock market rallies weren’t there to buoy the currency higher.
Only the Empire State manufacturing index is due today and a gain from 18.0 to 18.5 is expected. Stronger than expected results, combined with positive earnings data, could lead to a pickup for the dollar.
Still, it’s worth noting that the BOJ recently made some adjustments to its bond purchases, leading traders to speculate that tapering is in order. For now, doubts about the Fed’s pace of tightening remain owing to a weaker inflation outlook
[I]By Kate Curtis from [URL=“https://www.tradersway.com/”]Trader’s Way[/URL][/I]
