Fed on hold and shifted gear to patience mode; G10 currencies loves to make the way higher against the USD; Gold at eight months high; Ripple rallied 12%; Market wrap.
As everyone expected the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent and expressed the word “patience” which is dovish.
“The Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”
Fed on hold but not dollar, it took a toll on this dovish word “patience” and sold heavily against the G10 counterparts. AUD and NZD lead among G10 block with a percent gain.
The #dollar index (KTM: #USDX) lost 200MA after Fed says "Patience" on future rate hikes .
The corrective A-B-C pattern is pointing to 93.40-93.20 levels #fx #FX初心者 #fxch #dollarshaveclub pic.twitter.com/IrB5wErcPx
— KeytoMarkets (@KeytoMarkets) January 30, 2019
At one stage the AUD rose 1.50% posted a high at 0.7270, two-month high and ran through the target we set on Wednesday. Better than expected Q4 CPI reading and dovish Fed statement makes Aussie dollar “hot” overnight. Besides soaring, iron ore price in China is an additional bullish factor to AUD.
The antipodeans surprise the traders by forming a higher top & high bottom for the first time since Jan 2018 and April 2018 respectively.
The further return of USD weakness allows EM currencies to perform better. Turkish Lira and South African Rand rose nearly 2.0%.
Mexican Peso weakened against the USD on the weak Q4 GDP. The cross USDMXN spotted with a double bottom pattern and consolidating in a rectangle. Moreover, the daily indicators are incredibly bullish. Sustained trade above 19.30 will resume the up move taking the cross higher towards 19.45 and 19.60 in the near term.
In majors, EURSUD and GBPUSD continued to consolidate in tight ranges. 1.1500 and 1.3220 are the key resistance levels to watch out in Thursday’s session.
Turning to commodities, Gold was the first who push the price higher out of the range followed by AUD in FX. The weak dollar pushes the yellow metal to eight-month higher, but pauses at 80.0% fib reaction. The immediate, meaningful resistance seems between 1323.50-1326.00$ above these could push further higher to 1350$, 1365$ and 1375$ July 2016 high.
Supports located at 1315$ and 1308$.
Interestingly the price action from 1300$-1323$ has been driven on a negative RSI divergence.
Turning to Cryptocurrencies, Ripple rose more than 12% and spotted with a double bottom formation. The daily indicators are bullish.
At higher time frame, the price has solid support finds between 0.2430 and 0.1920.
However, forex and Commodity markets are expected to remain highly volatile ahead of tomorrow’s January NFP data. Among G10, we are watching USDJPY closely as US-China trade talks started and technically holds the pivotal 108.65, so far.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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