Fanfares for no surprise

"The simple message is the economy is doing well". And the widely expected rate hike is now fact along with raised Fed’s target for short-term interest rates to a range of 0.75% and 1.00%.

After the event the US Dollar plummeted due to the aggressive profit - taking and then followed elevation in the other major currencies. AUD/USD is up with 1.98%, EUR/USD added 1.23% and GBP/USD moved higher with 1.14%.  

Gold was also positively affected and was trading elevated. The precious metal surged above the significant support level at $1200 and marked a 1-and-a-half week high at $1228.76.
I do not trade news, but it was quite interesting to be only observer in a situation alarming for attention.

EUR/USD higher

Since the beginning of the week the EUR/USD has been sliding to downwards and in the early European session today hit a six week low at 1.0495. Finally we witnessed some revival right after the FOMC minutes release. As it was expected the US central bank voted to keep rates unchanged, although many FED officials see a rate hike „fairly soon” if the economy remains on track.

Following the FOMC minutes release the EUR/USD pair surged towards previous highs and the current market price is 1.0572. 

The four-hour chart is showing that the price is now flirting with 23.6 % Fibonacci retracement of latest decline and where now the bearish 20-day SMA is located. RSI and Stochastic have recovered from oversold region and have turned to north, but yet are below the mid-lines. The psychological mark at 1.0600 remains key resistance and in case bulls succeed to advance though it, next target is seen at 1.0620 (38.2% Fibonacci retracement of same decline). Looking to downwards first support is placed at 1.0520 (February 15th low) and lower at 1.0495 (the daily low).

EUR/USD Fed's Dot-plot Triggered Bearish Reaction

Finally it became clear that the Federal Open Market Committee is raising the benchmark interest rate by 25bp to range of 0.50% to 0.75%. Furthermore the central bank is going to extend the dot-plot to three rate hikes in the upcoming year.

The EUR/USD pair was failed to hold above 1.0600 mark ahead of the conference. After the press release the pair tumbled to 1.0530 and marked an inraday low even lower at 1.0495.

As seen on the H4 chart the price has moved well below the moving averages. RSI has turned sharply to south and is currently close to 30 level. Stochastic is currently placed within mid-lines but displaying strong bearish momentum. 

First support is seen at 1.0500  and lower at 1.0450. Resistance now is located at 1.0560 and higher at 1.0600.

Finally: Q4 Trading Kick-off

Nine months crossing the sea within stormy waters. And flying high through dark clouds. In the stretch of the final 2016 that’s how I may discribe the uncertainty of finacial markets. Zika, Brexit, Olympics triggered regret and excitement and shaked the markets in significant and remarkable way. But the last quarter of 2016 promises to be interesting and unpredictable as well. The presidential election in USA and the rising expectation of Federal Reserve’s rate hike will stir the mood.Are you ready to take part in this perfectly incomplete play, because the year is not completed yet?! Q4 is offering quite interesting trading opporunities and if you are interested, you may learn more from the the last webinar held by online broker ActivTrades and led by professional trader with 22 years of experience Paul Wallace, who discussed his game plan for the last leg of 2016. 

To know more, follow this link!

USD/CHF stuck around 0.98 handle

USD/CHF couldn’t post any significant movement yesterday. The pair manages to stay around 0.98 mark, after the bulls trying to conquer 0.9820 last Friday. Currently the bias remains bullish with next target 0.9850 - 0.9900 area. The intraday support is seen at 0.9745, where the 100-day and 50-day moving averages are crossing. A clear break below that area could lead the pair to neutral zone for testing 0.9750 - 0.9700 area. Further downside next support is located at 0.9690. Looking to the upside, resistance is seen at 0.9850. Major macro data that could stir the markets is due today by the SECO (State Secretariat for Economic Affairs) and tomorrow all eyes will be on Fed’s meeting.

US inflation showed better than expected numbers

Consumer prices in the US showed better that expected numbers in August, which is to indicate that inflation is getting closer to Federal Reserve’s target.

The consumer price index CPI in the country rose in August by 0.2% on a monthly basis with expectations for an increase of 0.1%, having in mind that in July remained at the level of the previous month, or 0.0%.

Major influence over the stronger than forecast increase in inflation appears to be the sharp increase of 0.9% in prices for medical services.

In August the US inflation accelerated on annual basis in August to 1.1 percent from 0.8 percent in July amid the expectations for an increase of 1%.

At the same time the main CPI index excluding the food and energy prices marked an increase of 0.3% , as on an annual basis rose by 2.3% amid the expectations of keeping the pace of growth from July with 2.2 %.

EUR/USD hit fresh new eight-week high

On Wednesday session the single currency was trading higher against the US dollar without being affected by the positive US data on labor market and factories. Federal Reserve's meeting minutes additionally stirred the market spirit. 

According to Fed’s minutes, the members of the board left the door open for the next rate hike. It seems that some of the members need more positive data and others support the opinion that the time has come. However, we must consider this meeting as a warning sign for upcoming rate increase, as inflation data is getting closer to Fed’s target. 

As a consequence, the EUR/USD pair was trading elevated with around 0.45%, to $1.1366 and hit a new eight-week high. 

Asian markets posted mixed trading

Ahead of notable decisions that are expect to be taken by Bank of Japan (BoJ), the Reserve Bank of New Zealand (RBNZ) the Federal Reserve (Fed), market participants are playing cautiously today. Lunacy started to conquer first Asian markets with pushing Japan equities lower but Chinese higher in the early trade on Tuesday.

The Chinese Shanghai Composite index increased with 0.64% to 2 965.40 points, and Hong Kong’s  Hang Seng climbed with 0.48%.

Japan’s Nikkei 225 dropped with 0.49% to 17,353 points, and South Korean’s Kospi closed 0.25% up to 2 019.63 points.

The Australian benchmark S&P/ASX 200 index fell 0.30% to 5 220.64 points.

Energy companies in the region traded mixed. Australian Santos reported a decline of 3.68%, while Japan's Inpex and Japan Petroleum recorded decreases of respectively 1.5% and 1.05%. Australia's Woodside Petroleum shares rose 1.44%, while China's Sinopec marked an increase of 1.46%.

The main exporting companies in Japan enrolled mostly downs. Shares of Toyota fell 0.72%, Nissan and Honda are down with respectively 0.99% and 0.69%. Sony reported an increase of 0.51% and Mitsubishi Motors wiped nearly 10% of the share prices.

Australian iron ore miners finished with declines after the steel-making component sloped to $66 per tonne. Fortescue Metals dipped with 6.25% and heavyweights BHP Billiton and Rio Tinto fell respectively with 3.06% and 2.95%.

Stock markets boosted by Yellen’s dovish speech

US stock markets registered an increase on Tuesday, completely erasing the losses from the beginning of the session. S&P 500 and Dow industrials reached the highest levels for 2016.

The growth was realized after the chairman of the US Federal Reserve Janet Yellen confirmed the doubts that an increase in interest rates will be very prudent because of the trembling stability of local and international economy.

The Standard & Poor's 500 index closed with a gain of 0.88% at 2,055.04 points. Among the other indices  Dow Jones added 0.56% to finish at 17,633.18 points, while the Nasdaq Composite gained 1.67% to end at 4,846.63 points.

European stocks finished trading on Tuesday at the higher levels, recording the first victory in five sessions onwards after the US Federal Reserve calmed investors that the next steps will be very cautious. Major indexes recovered positions, the German DAX 30 registered a growth of 0.4% to 9 887.94, while the French CAC 40 increased by 0.9%, reaching 4 336.67.

The British FTSE 100 index closed at almost neutral territory by losing only 0.1%.