THE GREENBACK SURGE CONTINUES AS TRADERS WAIT FOR FOMC MINUTES
Earlier today, the Australian Bureau of Statistics (ABS) released the wage growth numbers. The quarterly wage grew more than expected to 0.6% while the annualized rate grew by 2.1% which was slower than expected. At the same time, the bureau released the construction work data that missed analysts’ estimates by a large margin. As a result, the AUD extended its daily gains, falling by more than 0.50%. The pair is now trading at 0.7848.
The dollar continued moving up as traders waited for the FOMC minutes to be released later today. A new report from JP Morgan showed that small and mid-sized businesses were super bullish on the economy. The report showed that 89% of mid-sized businesses and 63% of small businesses were highly optimistic about the economy. The upward trend of optimism can be attributed to the recently passed tax reform package and Trump’s deregulation policies.
The pound continued its downward trend as traders waited for the inflation report hearings. Data from the ONS showed that wages continued to be a challenge for policymakers. The annualized wage growth (ex-bonus) grew by 2.5% compared to last month’s 2.4% while wages with bonus remained the same at 2.5%. The unemployment rate disappointed by rising to 4.4% compared to last month’s 4.3%.
The pair continued the drop it started a few days ago that came after the release of the RBA minutes. Apart from the economic data released earlier today, the currency pair was affected by the stronger dollar as traders waited for the FOMC minutes. With the ADX index being at 30, and with the moving averages in the pattern shown below, there are chances that the pair could continue moving lower. However, traders should probably wait for the FOMC minutes before initiating trades.
The EUR/USD pair fell by almost 30 points today as traders waited for the FOMC minutes. As shown below, the pair has been on a decline since last week when it hit a high of 1.2553. With the RSI showing a neutral stance, there is a likelihood that the pair could continue moving down, with the next price target being 1.2276. However, this will depend on the treasury yields and the FOMC report later today.
The pound is trying to recover some of the losses it experienced today as traders waited for the inflation hearings. It has now recovered about 35 points from its earlier low. This pair will continue to be influenced by the details that emerge from the inflation hearings and the dollar. A continued upward momentum could see the pair test the support at 1.3984.