EURUSD, GBPUSD and Gold: Trump calls for FX Manipulation
Currency wars are on the table.
Fears of Dollar Intervention added weight on Dollar Index on Wednesday. The chances of the FED cutting rates by 50 basis points on July 31 rose back to 35%. The probability had dropped to near 25% following Tuesday’s upbeat US retail sales data.
Trump’s recent Dollar-related tweets have triggered speculation that the US may intervene in the FX markets to keep USD from rising. He repeated his call for the US to match efforts by China and Europe to manipulate currencies and pump money into their economies, according to Reuters.
After disappointing the U.S housing data, Bat Pattern started to work. The pair recovered and tested 1.12400 resistance.
The Eurozone will not release important data. The pair is likely to continue to track US yields in Europe. A break above 1.12400 will send the pair 1.12600 and 1.12800.
We will have Initial Jobless Claims and Manufacturing indices in the New York session. A better than expected data set may send the pair back to 1.12400 – 1.12200.
Near term selling pressure remains on the pair as long as it stays below 1.12900. A firm closing above 1.12900 may open the gate to 1.13600 resistance.
With the latest news reports favoring the odds for soft Brexit, Cable recovered to 1.2440 ahead of the London open on Thursday. While voting at the House of Commons will be the key, British Retail Sales numbers could also entertain momentum traders amid lack of big data/events from the US.
GBPUSD is trading 1.24400 as of writing and open to Brexit Related volatility.
A break and firm closing above 1.24400 could send the pair 1.24800 and 1.25120. However, the upside seems capped.
We will wait for UK Retail sales data. If data comes above the expectations, the bulls will target 1.25100 and 1.25800. A break below 1.23900 will send the pair 1.23500 and 1.23290.
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