Summary:
- Janet Yellen’s comments to congress caused the greenback to trade in a wide range with an overall downward trend.
- S. stocks made significant gains with Dow Jones index creating a new high of the year. Keep an eye on S&P 500 and Nasdaq and watch if they would follow suit.
- Bank of Canada raised its interest rates as expected and brought USD/CAD down sharply to potentially test its weekly EMA169 support.
The dollar index traded wildly Wednesday 12, July, 2017 before FED chair Janet Yellen appeared before House Financial Services Committee at 22:00. Major currency pairs traded wildly along with precious metals while three major U.S. stock indices resumed uptrend with Dow Jones index even creating a new high of the year after Yellen’s prepared remarks released in advance at 20:30. In addition, Bank of Canada raised its interest rates as expected and brought USD/CAD down as much as 250 pips.
Technical
The dollar index (DXY) maintained its overall downward trend, potentially breaking down below its old low around 95.19. Its short-term moving averages could resume downward bias after recent consolidation while kept diverging with bearish bias along with its long-term moving averages on its H4 chart.
Regarding to non-U.S. currencies, euro fell back and found support at a rising trendline on its H4 chart after shooting up. The currency rebounded again in late Wednesday session and this morning trading, facing a modestly strong resistance above 1.1470. The sterling slipped and found support at its daily-period EMA60 Wednesday and then recovered. Its trading range on its weekly chart, however, remained intact with upside resistance at 1.3015 and downside support level at 1.2750. The recovery of price action of the commodity-link currency Aussie dollar carried on and almost regained its ground lost last week with upside target at 0.7710 high.
Let’s take a look at precious metals. Gold climbed up sharply after Yellen’s prepared remarks released in advance. Then it fell back to consolidate its gains rest of New York session. The gold price rebounded again this morning with its short-term moving averages going up and penetrating its long-term moving averages, potentially targeting EMA60 resistance on its H4 chart.
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.