- May 16, 2018
- Posted by: Joey Benedid
- Category: Market News
The dollar continues to see gains across the board as the Dollar Index inched to the highest levels since mid-December on the coat tails of 10-year treasury yields reaching as high as 3.09%. Yields came off those highs, but they were the highest levels we’ve seen in seven years. Yields have been climbing following the May Fed meeting, where the bank felt that inflation is moving closer to its 2% targets. The Fed projects two more hikes this year, but investors seem to be more bullish on the US economy and are expecting as many as three. USD also found support in Retail Sales numbers as they rebound following a weak first quarter. North Korea appears to have some form of buyers remorse after agreeing to meeting with President Trump in Singapore next month. North Korea believes that denuclearization demands are one sided and unfair. EUR is soft as the possible Italian government is seeking 250B EUR in debt relief from the ECB. GBP is range bound as there was no domestic data to drive prices. Sterling still faces an uphill battle as UK politicians still aim to formulate viable Brexit policy.
A quiet day on the calendar, as Draghi’s speech is the highlight for Europe and no primary data points out of North America. Canadian CPI on Friday is not expected to change from last month’s numbers. After USD blew through resistance levels yesterday short term support and resistance is 1.2800 and 1.2900 respectively. RSI climbed to 54 and the 200-day moving average resides at 1.2647.