It has been an eventful 24 hours in the trading realm following a veritable lack of activity to start the week thanks in large part to a couple of central bank meetings and some telling data about both European and US economies. As covered extensively yesterday (here and here), the Federal Reserve decided to completely taper away Quantitative Easing, a move that was widely anticipated, but also acknowledged more succinctly that the economy was improving to their liking. The positive vibes from the Fed were substantiated this morning as the Advanced US GDP for the third quarter showed stronger growth (3.5%) than expected (3.1%), and combined with Q2 (an upwardly revised 4.6%), was the strongest 6 month showing in a decade. Was the Fed privy to this before they released their statement yesterday? One can only theorize.
In addition to the US proliferation of news, the Reserve Bank of New Zealand shifted away from their hawkish stance to mimic their Australian brethren and go neutral while German and Spanish inflation data regressed even further, sporting negative values. If the European Central Bank didn’t already have a good argument for initiating their QE program, the continuously declining inflation figures in the region tips it in to the almost necessary category. Despite the positivity in the US and the negativity in the European Union, the EUR/USD has bounced off the lows following yesterday’s big drop.
The bounce in the EUR/USD also happened to coincide with a confluence of Fibonacci retracements and extensions that formed a Gartley pattern below 1.26. This level could be a staging point for another retracement to take place before we see an ultimate fall in this pair, which is the direction the ECB most likely wants to see it go.
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AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
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