Tiny Coronavirus dictates the policy choices of the world’s most powerful central bank’s hand and forces the Fed to stay dovish. The FOMC minutes reiterated the Fed’s commitment to maintaining their extremely accommodative monetary policy. According to the Fed, “the path ahead remained highly uncertain”. Traders are now focusing on Fed Chair Powell’s speech, due later today.  By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

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USD started to gain some ground in the US session yesterday as the EURUSD advance slowed down significantly. The pair hit the 1.1882 resistance we identified yesterday while USDCHF started to also attract buyers. The pairs have a high negative correlation so this was to be expected. GBPUSD declined further after failing to attract new buyers above 1.3900 the day before. USD rallied against the CAD even though the Canadian Ivey PMI surprised with a 12.9 point jump. Analysts expected the index to be confirmed at 62 but the actual number was as high as 72.9 which is the highest reading in 10 years. Weakness in USOIL tends to soften the CAD due to the commodity export-driven nature of the Canadian economy.

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A slight (0.82%) rise in the US Treasury yields caused the price of gold to take a pause after rallying higher on Tuesday. S&P 500 traded higher in yesterday’s session and the index futures are moving into new record highs at the time of writing this. The move was supported by the big technology companies (FB +2.23, AMZN 1.72%, AAPL +1.34%, GOOG 1.12%). The biggest mover in the US sectors was the basic materials which lost 1.72%. The communication services sector gained 0.77%. Today’s economic risk event number one is the Fed Chair Jerome Powell’s speech. For more details on macroeconomic releases see our economic calendar.  

NZDCHF has dropped almost 1.5% in just one week. Yesterday’s fall took the pair to the 0.6508 support from which the pair is bouncing higher this morning. The technical confluence areas above the price are 0.6565 – 0.6580 (SMA 50 and 23.6% retracement level) and 0.6596 – 0.6618 (SMA 20 and channel top). The confluence areas below the current price 0.6405 – 0.6415 (historical support and channel low). 

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Another big mover over the past week is the EURNZD which is up about 1%. The pair started to rally after it created a higher low at the beginning of the week and caused the SMA 20 to cross above the SMA 50. EURNZD is an interesting long candidate at lower levels. The most significant technical confluence areas are 1.6706 -1.6750 (SMA 20, SMA 50, 23.6% retracement and channel low) and 1.6945 – 1.6995 (38.2% retracement and recent swing high resistance).

Recent macroeconomic data releases

US Average Hourly Earnings -0.1%, 0.1% expected
US Non-Farm Employment Change 916K, 652K expected
US Unemployment Rate 6.0%, 6.0% expected
US ISM Services PMI 63.7, 58.3 expected
RBA Cash Rate 0.10%, 0.10% expected
Canadian Ivey PMI 72.9 62 expected
US Crude Oil Inventories -3.5M, -2.0M expected
US FOMC Meeting Minutes

Important macroeconomic data releases today

US Unemployment Claims 682K expected
Fed Chair Powell Speaks
RBA Financial Stability Review 

You may access the times and dates in the economic calendar here.

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Janne Muta
Chief Market Analyst
TIOmarkets.com

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All the prices in this report are CFD prices based on price charts provided by TIOmarkets unless otherwise stated.

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