- September 20, 2018
- Posted by: Joey Benedid
- Category: Market News
The Dollar continues to slide as the markets appear to be shrugging off concerns of the trade war between the US and China following the new measures both sides have taken this week. The US imposed tariffs of 10% on $200B in Chinese goods, while China retaliated with its own tariffs on $60B of US goods. The Fed is expected to hike rates by 25bps again for their September meeting, with contracts currently pricing in a 94.4% chance of a hike. Economists are calling for two more hikes this year, and as many as four more in 2019. Canadian CPI (2.8% vs 3.0%) is set for release tomorrow morning, and could force the US Dollar lower if we see positive numbers, continuing it’s current three day slide.
EUR is seeing strength against the broadly weaker Dollar, reaching 10 week highs for the pair. EURUSD broke key resistance levels, helping EUR breakthrough for multi-month highs this morning. While members of the EU met in Austria for an informal summit, USD news still dominates headlines. GBP is also up against the weaker Dollar this morning, hitting two month highs in the process. Brexit negotiations have not made much progress over the past few days and May has told members of the EU in Austria that there will be no second referendum, no extension talks and that the UK will in fact be leaving the bloc in March. Despite the dreary tones, Sterling took advantage of the weaker Dollar.
In addition to the EU Summit, the only other news this week is Canadian CPI. The FOMC Rate Decision will be the highlight for next week, as Powell makes his address on the 26th. Short term support and resistance is 1.2826 and 1.2952 respectively, with RSI down at 46 and the 200-day moving average residing at 1.2864.