USD rallies post FED

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Daily Outlook – 17 Sep 2020

By: Stuart Cowell

USD rallies post FED – Equities & Commodities lower, Bonds hold steady. Takeaways from FED – no rate increases until 2023, CPI under 2% until at least then, contraction not as bad as in June (-3.7% vs -6.5%), Unemployment 7.6% – not back to 4% till 2023. No new stimulus, nothing on small loans lending and government fiscal stimulus. (New centrist group proposed a $1.5 tn package, (supported by Trump) to bridge the $300mln – 3 tn gap). No Change from BOJ too, Kuroda press conference to come JPY holds 105.00 lows, Suga not a fan of a strong Yen. NZ – confirms recession GDP ( -12.2%) , AUD jobs better than expected. US data yesterday – weaker Retail Sales, and a big rise in Oil inventories (Oil has fallen overnight as the impact of Sally dissipates too) and U.S-China investment flows are at a 9-year low. Elsewhere – Von der Leyen – the chance of Brexit deal “fades every day”, Biden holds 9% lead in latest national poll, Law & Order agenda slips from 15% to 11%, robust plan for virus up to 27%.

USDIndex – recovered 93.00 – peaked at 93.55 (R2) – holds 93.50 this morning.

EUR – from 1.1885 highs yesterday to 1.1735 lows today. – now, 1.1760 and under S2 at 1.1765, S3 1.1725

JPY – slipped to 104.80 lows – stuck below 105.00 (pp) for now. R1 105.25, S1 104.60

GBP – Tested and stalled at 1.3000 yesterday, back to test 1.2900 overnight – now at 1.2935. PP & 200hr MA 1.2950

AUD – rallied to 0.7340 again yesterday, now 0.7260

NZD – Under 0.6700 now at 0.6680 (s2) from 0.6760 yesterday

CAD – 1.3125 lows last night to 1.3240 (s2) now.

CHF – Low of 0.9050 yesterday – now at 0.9125

BTC – Over 11,000 earlier – holds at 10,900

GOLD – rallied to test $1972 again yesterday & then fell to 1940 (s2) earlier. Back to 1946 now

USOil – Drawdown, demand worries, Sally passing (500k without power) and OPEC+ meeting – saw highs of $40.30 before slipping back to $39.50

USA500 – closed -15 at 3385 – back under Fast EMA’s – 10th day under 20MA – 50MA support at 3343.- FUTS at 3332

Today – EZ CPI, BoE (SARB) policy announcements, US building permits, Weekly Claims, OPEC+ meeting, ECB’s de Guindos

Biggest (FX) Mover @ (06:30 GMT) NZDJPY (-0.74%) – Rejection of 71.00 yesterday. Breached 200, 50 & 20MA – Fast MA’s aligned lower, RSI 27 & still falling, MACD histogram & signal line aligned lower & under 0 line from lrejection of 71.00 Stochastics move into OS zone. H1 ATR 0.1650, Daily ATR 0.6850.


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