USD: PPI Sends The Dollar Flying
Following yesterday's dovish Fed announcement, market expectations for a full 25 basis point hike from the Fed's yearly outlook were scaled back, causing the dollar to weaken. Consequently, EUR/USD saw gains as the dollar depreciated, testing resistance levels around 1.0942 and 1.0960, which correspond to Fibonacci retracements of previous major declines. The price action also highlights support levels at the 50 and 200-day simple moving averages (SMAs) and the 1.0830 marker. Despite this, the US dollar is expected to remain supported due to a superior interest rate differential and a resilient economy, especially if inflation prints continue to surprise on the upside. Additionally, the summary of economic projections (SEP) indicated a consistent upward revision of the Fed funds rate, suggesting a higher 'neutral rate' in light of robust growth and a strong labor market.
AUDUSD- H1 Timeframe
AUDUSD on the 1-hour chart recently broke a major trendline, with a retest of the trendline support and the Fibonacci retracement level, moving average support, and the breaker block. In line with these confluences, I will maintain a bullish sentiment on AUDUSD in the meantime in hopes of a new higher high.
Analyst’s Expectations:
Direction: Bullish
Target: 0.66249
Invalidation: 0.65593
EURUSD - H4 Timeframe
EURUSD has recently broken the previous structure after bouncing off the trendline support. In response to that reaction, I have drawn the Fibonacci retracement of the impulsive breakout, hence, I will be looking forward to seeing the bullish pressure revived anytime soon.
Analyst’s Expectations:
Direction: Bullish
Target: 1.09171
Invalidation: 1.08353
GBPUSD - H4 Timeframe
After the price action on GBPUSD raided the previous low, it dipped into the demand zone at the base of the algo-structure pattern. The presence of a trendline support overlapping the demand zone lends even more confluence to the already bullish sentiment.
Analyst’s Expectations:
Direction: Bullish
Target: 1.27809
Invalidation: 1.25987
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
You can access more of such trade ideas and prompt market updates on the telegram channel.