USD weakness persisted and the US Dollar index (DXY) measuring the strength of the USD against a basket of major currencies slipped by around 1.5% over the past two days. The DXY is currently trading at 100.25 compared to the 102 levels a week ago.
While last Wednesday a rate hike was indeed delivered, in line with expectations, it seems that Dollar bulls were also expecting indications for the possibility of more than the two more rate hikes expected throughout 2017 – and that did not happen. Its either that or its another “buy the rumour, sell the fact” to add to the list.
Gold (XAUUSD) has been responding positively since Wednesday’s FOMC anouncement; quickly turning from bearish to bullish, at least on the shorter time frames, as the USD weakened. From lows of $1197.50 last Wednesday to highs of $1233.44 on Thursday. However it will need to take on the 20DMA to be able to open up further support.
EURUSD continues to aim higher and has reached 5-week highs throughout yesterday’s session. Curreny the currency pair is at 1.0768 sitting at a daily resistance level. If it manages to go past this hurdle the next horizontal resistance in sight is 1.0828 which is also 02nd February highs.
Relatively speaking and compared to earlier events this week, the economic docket is rather quiet this morning with data out of the EZ being fairly low key. Events pick up as we approach the US session with Industrial Production and University of Michigan consumer sentiment for the month of February.