Forex News: US Dollar Recovers but Remains on Shaky Ground
Forex News: The US Dollar strengthened yesterday ahead of the press conference of U.S. President-Elect Donald Trump which will take place later into the session. However, the next move is uncertain and depends a lot on the things that will be said by the President-Elect.
The pair broke the 50 period Exponential Moving Average on a four hour chart and touched 1.0460; if this barrier also breaks, we expect another test of 1.0366 but at the time of writing, President-Elect Trump did not speak yet and this will be a major factor that will influence the US Dollar throughout the days to come. A sudden move above 1.0525 and the 50 period EMA will make the picture bullish again, opening the door for a break of 1.0610 and 1.0650.
Today at 1:30 pm GMT the U.S. Unemployment Claims are released, showing the number of persons who asked for unemployment related help during the previous week. The indicator usually doesn’t have a strong impact on the currency but higher numbers show that more people are unemployed in the United States and this means that consumer spending is likely to decrease. The forecast for today is 266K while the previous number was 235K.
The pair broke yesterday the key support at 1.2090 after an encounter with 1.2200 and an almost perfect bounce off of it. The downtrend has a new low and the bears are in control of short term movement.
The resistance at 1.2200 proved to be a great place for downtrend resumption and now the key support at 1.2090 is broken, making the picture bearish once again, after a brief period of ranging movement. The pair is in ‘uncharted’ territory and the last known low is 1.1062, reached on the 6th of October 2016. This level may or may not turn into support but of course it is too far to be of any importance for short and medium term movement. We expect today’s price direction to be influenced by the aftermath of Trump’s speech and we recommend caution.
Today is another lacklustre day for Pound’s economic calendar, but the pair’s direction will be heavily affected by the US Dollar and how it responds to President-Elect Trump’s attitude.
Written by: Bogdan Giulvezan
The article above is based on the writer’s 7-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.