DXY held steady for the time being on better-than-expected inflation data, while Federal Reserve Chairman Colin Powell stated he was optimistic about the economy and said it was unlikely to adjust interest rates again any time soon. Powell’s testimony follows the Fed’s third rate cut of the year in October. After the meeting, Powell got up the threshold for further rate cuts, but suggested the Fed was still a long way from raising rates.
CPI was stronger in October than the previous month, and health maintenance costs rose sharply, suggesting a pickup in the core PCE price index last month. Core PCE price data will be published later this month. Some officials recently stressed that inflation stays below the Fed’s 2 percent target. For instance, Minneapolis Fed President John Kashkari has said the Fed should make a public statement that it will not raise interest rates until inflation is stable at its target level. Evans, the president of the Chicago Fed, went even further, sounding out the fed should make it clear that if inflation is just over 2 percent, it’s fine.
Agreeing to the CME Group’s Fed Watch tool, there is no more than 30 percent chance of a rate cut by July 2020. In addition, there was a message about car tariffs. U.S. President Donald Trump has said he will get a decision on car tariffs soon. The White House has repeatedly discussed EU car tariffs. Lately, it was announced that the tariff decision would be delayed by six months, but this was rejected by Mr. Trump yesterday. As a consequence, both EUR and GBP remain low consolidation.
The DXY’s Wednesday correction was supported above 98.25, rebounding below 98.45 and closing at 98.37, meaning the USD short-term correction is likely to stay on a rally. If the DXY pullback is supported above 98.30 today, the quarry of the post-market rally will point to 98.45-98.55. Today, DXY short-term resistance at 98.40-98.45, short-term important resistance 98.50-98.55. DXY short-term support at 98.30-98.35, short-term important support at 98.20-98.25.
EUR/USD rebounded below 1.1025 on Wednesday, with a correction above 1.0995 and closing at 1.1002, meaning that the EUR/USD short-term rally is likely to maintain the correction. If EUR/USD bounces below 1.1020 today, the quarry of the post-market correction will point to 1.0990-1.0980. Today EUR/USD short-term resistance at 1.1015-1.1020, short-term important resistance at 1.1030-1.1035. EUR/USD short-term support at 1.0990-1.0995, short-term important support at 1.0980-1.0985.
Today’s Forex Trading Strategy Recommendations:
EUR/USD: 1.1020 Sell, 1.1040 Stop Loss, 1.0980 Take Profit
GBP/USD: 1.2860 Sell, 1.2890 Stop Loss, 1.2800 Take Profit
USD/CHF: 0.9925 Sell, 0.9955 Stop Loss, 0.9870 Take Profit
USD/JPY: 1.0910 Sell, 1.0940 Stop Loss, 108.60 Take Profit
AUD/USD: 0.6820 Buy, 0.6800 Stop Loss, 0.6870 Take Profit
USD/CAD: 1.3275 Sell, 1.3300 Stop Loss, 1.3205 Take Profit