USD Weak On Fed Member Speeches March 24, 2015
FOMC Member Speeches Weaken USD
With the admission that the Fed will not be raising rates anytime soon we have been getting more Fed member speeches trying to weaken the USD further since they believe the strong USD will hurt what little recovery they think, or more so, want to see. As many of you know, my belief is there really has been no recovery so the strong USD will do even more damage going forward. Therefore they will be wanting to weaken it further in order to give the economy some potential momentum at the cost to other countries. I have to say I do find it comical even though it is no laughing matter. When we hear Fed members say that “the USD strength is being caused by ECB QE” we dont have far to look back to see that it was Fed QE that caused Euro strength. And so the circle jerk continues. One would think this cant go on forever but trying to pin point the end is not a good idea considering what we have seen them do to keep the charade going.
EUR/USD Makes Second Intraday Push
With the EUR/USD making the second intraday push upward yesterday I will be bias for the long during London this afternoon. The best level is at the Asian lows around the 1.0910 level but I will be cautious of the potential to test lower to 1.0884. Having said that I will be open for a short considering these pushes are well outside normal range but will want to see conviction below 1.0884 expecting a test lower around yesterdays lows.
GBP/USD Holds Upper End Of Range
Not much has changed regarding price action on the GBP/USD. It has shown some strength rejecting 1.4862 but with no conviction on a break it has just as much potential to hold below and even test lower today. I will be open on direction looking at yesterdays highs of 1.4975 for the short and waiting for a long if it can dip to 1.4846 but if it does test down I prefer to be short looking to take profits.
EUR/JPY Pushes Higher With EU
We still have the EUR/JPY pushing with the Euro so I will have a bias for the next move Up on this pair as well today. The best level currently is the Asian lows but as with the EU they could test lower to 130.47 before a push upward. I will still be open for the short but prefer to see the conviction below 130.47 before considering it.
Forex News Today
The calendar starts of with Euro Zone Manufacturing and Services PMI data expecting improvements from Germany and the EZ so as long as they are as expected or better than it should create some Euro strength. A little later there is UK CPI, PPI and RPI expecting a mixed bag on improvements vs declines. Price movement will be more dependent on the larger misses but have a higher probability of offsetting each other.
The US also has CPI data expected mostly flat and a Fed member speech at the same time. Later both Manufacturing PMI and New Home Sales are expected to drop so any miss to the downside should be negative for the USD even if its only temporary.
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