In his speech yesterday the Fed Chair Powell reiterated the central bank’s commitment to supporting the economy. According to Powell, the Fed will continue supporting the economy as long as it is necessary. On a separate note, he said that the Fed is not planning to destabilize the banks with a digital currency. Technology stocks moved up yesterday while the treasury yields retreated a bit. Gold is moving sideways below a key resistance level and oil struggled to move higher while EURUSD gained and looks like it wants to move higher 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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Risk sentiment degrades further in Asian markets as western governments place sanctions on Chinese officials for the country’s human rights abuses among Uighurs. The United States, the UK and European Union joined together to voice their opposition to China’s actions which didn’t please the Chinese. China’s retaliation measures included sanctions against EU lawmakers and diplomats.

The economic calendar for today is slim when it comes to significant risk events but apart from the speech by the BOE Governor Bailey, there is one that will draw the attention of traders, big and small alike. Traders are focusing on the testimony from Fed Chair Powell and US Treasury Secretary Yellen. Tomorrow however is a big day as the PMI numbers are released from major economies. They are a likely source of volatility. For more details on macroeconomic releases see our economic calendar

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NZDUSD is falling off the cliff. After the pair failed to stay within the rising trend channel NZDUSD has created a market top and moved below some major supports. Projection from the channel width points to the 50% retracement level (at 0.6975) and slightly beyond. These projections often are just minimum targets as the price could go much further. The next support after the 0.6975 is at 0.6797. The penetrated 0.7096 support level is now a resistance level. Other technically important levels are 0.7269 and 0.7464.

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AUDUSD has created lower highs and is now at risk to follow the NZDUSD lower. The recent rise in the US Treasury yields has supported the USD and put pressure on AUDUSD too. The pair is now trading at rising trendline support but a break below it would likely bring the next support(s) into play. The levels to focus on in this market are 0.7563, 0.7621, 0.7849 and 0.8006. The rising trendline is also a neckline for a big head and shoulders formation. If we see a decisive break below the neckline, the market is likely to stay in a bearish mode for quite some time. Open a VIP Black account with us. There are no per trade execution or monthly fees on our VIP Black accounts.

Recent macroeconomic data releases

  • New Zealand GDP -1.0%, 0.2% expected
  • Australian Employment Change 88.7K, 30.5K expected
  • Australian Unemployment Rate 5.8%, 6.3% expected
  • BOE Official Bank Rate 0.10%, 0.10% expected
  • Canadian ADP Non-Farm Employment Change -100.8K, -65.8K previous
  • US Philly Fed Manufacturing Index 51.8K, 22.5 expected
  • Canadian Core Retail Sales -1.2%, -2.8% expected
  • Canadian Retail Sales -1.1%, -3.0% expected

Important macroeconomic data releases today

  • BOE Governor Bailey’s Speech
  • FED Chair Powell’s Testimony

You may access the times and dates in the economic calendar here. Open a VIP Black account now at www.TIOmarkets.com. We want you to be able to exploit trading opportunities in financial markets with 0 commission and tight spreads. Take advantage of the best trading account in the industry: Tiomarkets VIP Black. For more details on this truly exceptional offering see here. For more analysis and commentary, visit our YouTube channel where you can find daily market commentary videos to support your learning and growth as a trader.

Trade Safe!

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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