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FED Speech, Euro GDP and AUD Labor Market. EUR/USD, USD/JPY, AUD/USD

Nov 14 2019, 06:49 PM (BDT) |


US Federal Reserve Chairman, Jerome Powell, spoke yesterday before Congress. He stated that the United States Economy is showing growth, the labor market is strong and inflation is consistent. 

He stated that the full effect of the three rate cuts this year has not yet been felt and that he and his colleagues do not see the necessity in another rate cut in the near future unless there is a substantial change in the economic outlook. 

Powell stated, “We see the current stance of monetary policy as likely to remain appropriate with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2% objective.” He continued, “The baseline outlook remains favorable ... My colleagues and I see a sustained expansion of economic activity ... as most likely.”

The statement is cautiously hawkish overall for the time being and the market did not have much of a reaction.

German GDP is pleasantly above forecast. YoY Q3  is 1.0% and ahead of the 0.9% forecast. QoQ Q3 is 0.1% ahead of the forecasted -0.1%. Hungary and Poland also reported better than expected GDP. The Eurozone GDP report followed with QoQ Q3 released at a steady 0.2%, while YoY Q3 is slightly better than expected at 1.2% ahead of the 1.1% forecast.

EUR/USD on a Daily TF, is trading lower. The pair is just about to hit our next target in the vicinity of 61.8% Fibo level. The pair dropped to 1.09940 and is currently trading at 1.10030. The MACD histogram is decreasing. Another move down towards 1.09733 is not ruled out, keeping in mind that that Ichimoku Cloud bias is bullish.

Resistance:  R1 38.2% Fibo 1.10647, R2 23.6% Fibo 1.11086.

Support: S1 61.8% Fibo 1.09939, S2 1.09733.

Japan’s GDP QoQ Q3 was released and is worse than expected at 0.1% below the 0.2% forecast. Previous reports were revised to the upside from 0.3% to 0.4%. YoY Q3 reported at 0.2% below the forecasted 0.8% and the previous report was also revised to the upside from 1.3% to 1.8%, which accounted for the targets being off so widely.

USD/JPY on a Daily TF hit our first support target around 108.600 and our expected trend line. Ichimoku Cloud Bias bullish, Parabolic SAR pointing up, DMI registering an uptrend.

Resistance: R1 61.8% Fibo 109.362, R2 109.620, R3 110.095.

Support: S1 108.298, S2 107.484

The Australian Dollar dropped by 0.67% against the greenback on the Daily TF due to a significant drop in employment reported at -19K, which came in below the forecasted 15K of growth. The pair dropped below 50% Fibo and met the top of Ichimoku cloud as support around 0.67906. Ichimoku Cloud bias is bullish, while the Parabolic Sar remains bearish.

Resistance: R1 38.2% Fibo 0.68307, R2 23.6% Fibo 0.68685

Support: S1 61.8% Fibo 0.67695, S2 0.67541.

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