The long overdue market correction is here for the US dollar. Just to add insult to injury, yesterday’s FOMC minutes turned out unbelievably dovish.
We know a tighter monetary policy is going to happen, it’s just the ‘when’ part everyone is trying to gauge.
As a result, dollar bulls need to be more patient.
If you are stuck in your bullish dollar position, you need be disciplined while you wait for the market correction to be over.
Set your stop loss order properly before you lose all your money. If you have enough margin, you can stay in for the market to recover and re-start earning pips.
What’s up with the Fed’s Cautious tone
Although the minutes confirmed that the Fed is on track to end its asset purchases this month, it also showed that the U.S. central bank has no plans of hiking interest rates anytime soon.
Wednesday’s FOMC minutes revealed that several Fed officials are worried that disappointing growth around the world and a strong dollar could very much impact U.S exports. These very thoughts have the market reassessing the precise timing of the Fed’s first-rate hike, with expectations now being pushed further into the future.
As I have said before in the “all about that buck” video stronger local currency makes a country’s exports relatively more expensive in the international scene, possibly weighing on demand. It doesn’t help that most major economies, such as the euro zone and Japan, are slowing down and likely to reduce their imports from Ms. USA.
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Intraday Forex Technical Levels
EUR/USD 4-hour: Teasing the pivot point
Invest Diva Likes: Short positions below 1.2763 with 1.2666 and 1.2600 in extension.
If Pair Goes Nuts: Above 1.2763 look for further upside towards 1.2844 and 1.2926.
What’s up on the Forex Dance Floor: The pair broke above the Ichimoku’s cloud and teasing the key level at 1.2763 as well as the upper boundary of the Bollinger Band. The RSI is heading below the overbought zone.
Supports and Resistances
1.2926
1.2844
1.2763 Pivot Point
1.2666
1.2600
GBP/USD 4-hour: Approaching 50% Fibonacci
Invest Diva Likes: Short positions below 1.6162 with targets at 1.6084 and 1.5959 in extension.
If Pair Goes Nuts: Above 1.6224 look for further upside towards 1.6287 and 1.6365.
What’s up on the Forex Dance Floor: The pair is now inside the Ichimoku’s cloud and teasing the upper boundary of Bollinger Band as well as our pivot point which is set at 50% Fibonacci leve. The RSI is mildly rebounding from the overbought zone.
Supports and Resistances
1.6365
1.6287
1.6224
1.6162 Pivot Point
1.6084
1.5959
USD/CHF 4-hour: Correcting gains
Invest Diva Likes: Long positions above 0.9491 with 0.9573 and 0.9689 in extension.
If Pair Goes Nuts: Below 0.9491 look for further downside towards 0.9392 and 0.9317.
What’s up on the Forex Dance Floor: The pair is on an overall uptrend but now shoing a correction and moving down after reaching the top level at 0.9689. Now the pair is teasing the support level and the lower boundary of Ichimoku’s cloud at 0.9491 with the RSI just above the oversold zone.
Supports and Resistances
1.2926
1.2844
1.2763 Pivot Point
1.2666
1.2600
USD/JPY 4-hour: Forming Double top pattern.
Invest Diva Likes: Short positions below 108 with target at 106.71 and 105.67 in extension.
If Pair Goes Nuts: Above 108 look for further upside towards 109.17 and 110.08.
What’s up on the Forex Dance Floor: The pair appears to have confirmed a break below the neckline of a possible Double Top pattern at 108. The RSI is below the neutrality area.
Supports and Resistances
110.08
109.17
108 Pivot Point
106.71
105.67
