Culture trumps strategy.
USD
EUR/USD
The single currency rallied to $1.1592, although U.S. inflation data showed prices rose solidly last month, while the minutes from the Federal Reserve's September meeting confirm tapering will begin "soon".
GBP/USD
Sterling drifted higher to $1.3665 on Wednesday, shrugged off data showing weaker-than-expected economic growth in Britain and focused on bets that the Bank of England will raise interest rates.
USD/JPY
The yen tumbled from 113.20 to 113.56 per dollar on comments from Kozo Yamamoto, a senior member of new Prime Minister Fumio Kishida's government party that a weak yen is favorable for the export-based economy.
USD/CAD
The Canadian dollar strengthened against its U.S. counterpart to 1.2425, on broad dollar weakness as a pullback in U.S. bond yields weighed on the greenback.
AUD/USD
The commodity-linked Aussie dollar vaulted to $0.7387, amid mixed Australian jobs reports and softer Chinese CPI print.
USD/ZAR
South African rand soared to 14.78 per dollar, ignoring disappointing domestic retail data that demonstrated sales fell 1.3% year on year in August.
USD/MUR
The dollar-rupee lingered at 43.05(selling) on the foreign exchange market.
16:30 - USD - Initial Jobless Claims
16:30 - USD - Crude Oil Inventories
16:30 - USD - PPI(MoM)(Sep)
The dollar Index extends its intense rebound near the 94.00 threshold, clinching a new high for this year 2021 amid an earlier rate hike expectation and announcement of a nearing tapering asset purchase which clearly impacted the yield curves.
A tightening of monetary policy by the European Central Bank remains far in the future but ECB remains vigilant on its inflation figures yet to be released this Friday. This could give additional upward momentum on the USD in the near term and exerts additional selling pressure on the euro and the pound.
On the technical side, after a breach and close above the 100% retracement A-B-C (93.72 level) ,the greenback could easily approach the 113% level at 94.38 followed by 127% level – 94.98 level in the near term. Resistance at 96.47 (161.8%) remains key level to watch
1.3750 marked the completion of ‘wave e’ of the triangular retracement (wave B) of corrective move A-B-C for GBPUSD and abruptly, we saw fresh sellers entering the market below the 1.3600 levels yesterday.
As per Elliott wave principle, GBPUSD is battling around 1.3515 levels and higher inflation, Brexit and Petroleum concerns could exert further pressure on the pound towards 1.32 levels towards completion of wave C.
A breach and close above 1.3750 nullify this downward pattern.
