18.07.2019: USD obeys Federal Reserve (USDХ, AUD, JPY)
Yesterday the US dollar index versus a basket of six major currencies slipped as yields of the US 10-year Treasuries fell to 2.04% in response to Donald Trump’s remarks. The President voiced concerns about the unresolved trade conflict between the US and China.
Following a rise to 97.30, the index settled down at 97.10. Today the index finds it difficult to follow a clear trajectory despite the fact that the manufacturing index by Philadelphia Federal Reserve showed a surge and unemployment claims revealed a positive figure. At the same time, the US dollar index is trading firmly above 97.00.
Today bears are setting the tone for the euro/dollar pair which aims to break out the support level at 1.1200.
The euro has been losing ground in light of the news that the ECB could revise its target level for inflation. Besides, the euro came under pressure following comments of Luigi Di Maio, Italy’s Deputy Prime Minister and the leader of the 5-star movement. The policymaker dropped a hint that the League wants to topple the government.
The euro/dollar pair sank from an intraday high at near 1.1250 and retraced to a one-week low at 1.1220. Thus, sellers again entered the market as the pair is unable to break important resistance at 1.1280-1.1290.
The USD/CAD pair hit a new intraday high at about 1.3065-1.3070 in the early North American trade. However, the pair still cannot continue a rally.
An upbeat report on Canada’s employment made no impact on the Canadian dollar, though unstable oil prices are capping the loonie’s advance.
ADP payroll processor reported that the number of employed people in Canada increased by 30,400 in June following contraction by 16,000 in May.
Meanwhile, all we have to do is wait whether the pair will be able to develop a rally amid declining oil prices. Otherwise, the pair could face resistance at highs on the back of speculations about a deep rate cut by the Federal Reserve at the meeting on July 30-31.
That’s all for today. We wish you profitable deals! See you tomorrow on InstaForex TV channel!
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