empty
 
 
15.04.2019 02:17 PM
Dollar declined but will stay in the range (A corrective decline is expected in AUD/USD and USD/JPY pairs)

As a result of last week, the US dollar fell against the major currencies for the exception of traditional safe-haven currencies, particularly the Japanese yen and the Swiss franc.

Coordinated movements of major currencies in tandem with the US dollar are explained by the same investors' expectations for which the Fed's proposed actions regarding the monetary policy outlook are still a guide. This is a high probability that the regulator will continue to wait for the national economy, as well as globally.

Also, a significant role in easing the US dollar is played by postponing Brexit until October of this year. Although it retains a factor of uncertainty, it increases the hopes of supporters of maintaining Britain in the EU, which has a positive effect on the pound sterling rate.

One more weighty and negative reason for the dollar is the preservation of hopes that negotiations on trade between Washington and Beijing will be achieved. And again, although they are not expected to do something super positive, the mere fact of stopping the escalation of a trade conflict and the introduction of contractual trade into a certain course is already positive for financial markets and supports the demand for risky assets, which also contributes to the appreciation euro currencies and commodity group currencies.

In this regard, it is important to understand whether the further weakening of the dollar will continue. In our opinion, despite the statements by the Fed and many members of the Central Bank including the head Jerome Powell himself, who argued that the rates will not rise anymore, there is a possibility that inflationary pressure will increase. In any case, the inflation data published last week showed a sharp upward jump. Moreover, we can assume here that if it continues to rise then the Fed will have to raise rates at least once more this year. The Fed understands this and likely to pause while continuing to monitor the situation.

Assessing the overall picture, we believe that the lateral dynamics in the foreign exchange market will continue for some time.

Forecast of the day:

The AUD/USD pair was adjusted downward after reaching a local maximum. If it stays below the level of 0.7175 and drops below the level of 0.7160, there is a probability of continuing the correction to 0.7125.

The USD/JPY pair also had a downward correction as it was below the level of 112.00 and largely fell to 111.55, which will correspond to 23% Fibonacci retracement. Overcoming this mark will lead to a continuation of the fall to 111.30.

This image is no longer relevant

This image is no longer relevant

Pati Gani,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback