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The Single currency surged to a fresh high of $1.1422 post FOMC last night, but the weak tone in the global stock markets boded well for the U.S dollar and pushed the pair back to $1.1335 this morning.
The Pound made a U-turn from $1.2823 last night to $1.2660 this morning as fears of hard Brexit started to weigh on the cable, after the European Union’s (EU) chief Brexit negotiator Michel Barnier flashed some stark warning to the UK while speaking at the European Economic and Social Committee.
The Yen extended gains to 107.00 per dollar amid weak tone in the US stock index futures. The US central bank cut economic forecasts and anticipated the rates to remain unchanged until 2022.
The Australian Dollar slumped to a low of $0.6922 from $0.7063 as risk-off trading intensified and boosted the haven demand for the U.S dollar across the board, while the Australian-Sino tensions also remained a drag on the Aussie dollar.
The rand cascaded to 16.72 against the greenback after the US Federal Reserve kept the door open for unconventional monetary policy tools, like Yield Curve Control (YCC) while announcing a no rate change on Wednesday.
The USD/MUR kept the idle stance at 40.10(selling) this morning, unfazed by international market movements.
16:30 - USD - Initial Jobless Claims
16:30 - USD - PPI (MoM) (May)
- From an Elliott Wave standpoint, USDCHF could potentially unfold into compelling impulsive Wave C of the zigzag correction of Wave (2) to a narrowing region 0.9550 (50% retracement of Wave (1)) to 0.9395 (100% projection of Wave A through B) in the near term trend, from the downside bias from April 6th high of 0.9797.
- Price could immediately start to shoot back up into Wave (3) on a longer perspective.
- Piercing above the resistance 0.9905 would endorse the structure.
- Alternatively, broader bearish invalidation of Elliott Wave Structure rest at 0.9191 of March 9th low while Relative Strength Index signals a bullish recoil higher for the pair.