Wednesday, December 11th FOMC decides to leave US interest rate unchanged at 1.75% and maintain in within target range of 1.50-1.75%. Fed. Chair Jerome Powell neutral-dovish, no rate hike expected in the near-term.
EUR/USD on a Daily TF has hit both of our resistance targets. The pair surpassed 1.11285 and is using the level as support. MACD Bullish histogram is increasing, Parabolic SAR pointing up. RSI within range at 62.
Bullish momentum is due to a drop in USD from dovish FED. Today at 12:45pm GMT the ECB will make the first decision led by Christine Lagarde. Volatility is expected. Lagarde is famous for being dovish, but with criticism of previous ECB President Mario Draghi’s loose policies, it only remains to see how Lagarde’s first statement will sound.
Resistance: R1 200 EMA 1.11632, R2 1.11933, R3 1.12500
Support: S1 23.6% Fibo 1.11086 – 1.11, S2 38.2% Fibo 1.10647, S3 50% Fibo 1.10293.
Brexhausted UK Citizens head to the polls to vote for the new Prime Minister today. Tomorrow when the sun goes up in London the nation will have a new leader and an understanding if the country is finally heading out of the EU by January 31st 2020 with Conservative Boris Johnson or another Brexit referendum may resurface with Labour Jeremy Corbyn.
GBP/USD on a Daily TF has been enjoying a rally, as opinion polls have been pointing to a Conservative lead of 10%. The pair broke above 50% Fibo and met resistance at 1.32296. The slowdown in bullish momentum is due to the latest YouGov opinion poll released yesterday which states ‘The model which correctly called 93% of seats in 2017 currently shows that a small Conservative majority is likely.’ is now slightly less optimistic for Conservative majority and increases the chance of a hung parliament. A Conservative win plus majority will likely be bullish for GBP.
Resistance: R1 1.33500, R2 61.8% Fibo 1.34529, R3 1.36179.
Support: S1 1.30, S2 38.2% Fibo 1.28821, S3 1.27685.
USD/JPY on a Daily TF, remains in a flat range. The pair dropped to 108.457 on dovish FED statement and then recovered back up to 108.660 after a dovish speech by Bank of Japan Deputy Governor Masayoshi Amamiya – ‘ the Bank expects short and long-term interest rates to remain at their present or lower levels as long as it is necessary to pay close attention to the possibility that the momentum toward achieving the price stability target will be lost.’
For USD/JPY the next important event is the Trade Agreement between United States and China and the additional tariffs deadline of December 15th. Tensions and uncertainty may lead to a sell off as investors become more reliant on safe haven assets, while positive notes of progression would be bullish for the pair.
Resistance: R1 108.766 (200EMA), R2 61.8% Fibo 109.362, R3 109.731 (December high).
Support: S1 50% Fibo 108.423, S2 107.886, S3 38.2% Fibo 107.484.