Next week we will receive the answer to the question that occupies the minds of all analysts, investors and traders: “Will FOMC hike the interest rate or not?”
Whether the USD will continue to dominate all other financial instruments or there will be a new “anti-dollar” trend depends on that answer.
By looking at the EUR/USD charts with or without a rate hike I would say that from a purely technical analysis point of view it is logical to expect a move to the downside, perhaps towards parity or even a little below parity.
Whenever the USD is strong Gold stops being a shelter in the storm and this is exactly the case. The precious metal is falling towards the support at 1,025 and unless the interest rate remains the same it will likely reach that level.
What is the situation with USD/JPY? Despite all the RSI divergences all the expectations for a correction so far prove false.
Today the pair formed a new high and it is clearly climbing towards 115.50 or even higher. More importantly, it has become clear that this impressive rally is an impulse and not a correction, and that is likely not the B wave of a correction, as I thought it was up until recently. The impulse to the upside resembles everything else but a B wave.
Either way, the FOMC meeting will solve this mystery and it will make it clear whether this rally will continue and how high it will climb.
Good point, I'll keep it in mind!
ReplyDeleteLet's see what effect the fundamentals will have on it.
ReplyDeleteGood analysis!
ReplyDeleteThanks for such an informative analysis.
ReplyDeleteThis week is critical.
ReplyDeleteGood post.
ReplyDeleteA good post with good insights into the situation.
ReplyDelete