General market theme
Limited price action in the markets yesterday as the dollar sell-off after the Fed meeting has eased as investors realize that even though they might have been expecting more from the US central bank the dollar still remains the currency with the most prospects to see a higher rates policy this year or early in 2017. As such both the euro and thepound lost any momentum they picked up post-FOMC and it now remains to be seen whether their rallies will be reversed as the dollar picks up pace again. There are a few US-related reports today and most of them are expected to confirm the good pace of growth in the States and this could act as a trigger to further back the US currency as the week draws to an end.
Price action highlights
The euro edged a bit higher yesterday and made it above the 1.1100 level briefly but the momentum that took the Single currency to these levels seems to have died out as the euro ended the day just shy of this area. For the recent gains to be reversed we need to see the dollar attracting investors’ attention once more and today’s GDP report from the US might do so but after euro’s volatile reaction to the Fed meeting we should tread carefully until we get a clear confirmation that the euro is looking lower and the dollar is back in control.
The cable was more bearish than its european counterpart over the past 24 hours and it retreated lower after the post-FOMC gains, the UK currency dropped below the 1.3200 barrier again and corrected as low as the 1.3110 area. Overnight the pound did make another attempt to the upside but it failed to reach its previous highs and now this lower high suggests that the pound could correct even deeper. Should the dollar gain some momentum we could see the cable dropping to its 1.3050 lows before the week is over.
Focus of the day
There are quite a few important reports from europe and the US scheduled for release today, eurozone’s unemployment and inflation figures along with the european and US GDP reports and the Personal Consumption levels create quite an interesting environment ahead. Most US-related data are expected to print in a bullish manner so we might see dollar higher again.
Disclaimer: The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.
InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought."