- FOMC says rate hikes may be needed in 2019 if economy evolves as expected.
- USD stages modest recovery on FOMC's relatively hawkish tone.
- Coming up: Australian labour market data.
After rising to its highest level in two weeks at 0.7183, the AUD/USD pair erased its daily gains and turned flat on the day near 0.7160 before rising modestly in the last minutes. As of writing, the pair was trading at 0.7172, adding 0.12% on a daily basis.
In the minutes of its January 29-30 meeting, the FOMC said that several participants saw further rate hikes appropriate in 2019 if the economy evolved as expected. Regarding the balance sheet reduction, "Almost all participants thought it would be desirable to announce plan to stop reducing balance sheet later this year. " the FOMC noted. "Many policymakers suggested that some further very gradual decline in average level of reserves could be appropriate."
Although the FOMC's publication didn't necessarily offer anything that wasn't already mentioned before, the greenback started to recover its daily losses with the US Dollar Index advancing to 96.50 area.
In the early Asian session, the Australian Bureau of Statistics will release the January labour market report, which is expected to show an increase of 15K in the number of employed. Previewing the data, "January is seasonally a weak month for employment as seasonal jobs are no longer required, but this is adequately captured by the seasonal adjustment process. We look for +20k jobs for January, and with an unchanged participation rate of 65.6% leaves the unemployment rate at 5.0% (mkt +15k and +5.0%)," said TD Securities analysts.
Technical outlook by FXStreet Chief Analyst Valeria Bednarik
Ahead of the Asian opening, the pair is trading unchanged daily basis, holding above its moving averages in the 4 hours chart, with the 20 SMA gaining upward traction at around 0.7145, providing an immediate short-term support. The Momentum indicator in the mentioned chart offers a neutral stance, heading nowhere around its mid-line, while the RSI is also lifeless but around 59, all of which suggests a limited bearish scope at the time being.
Support levels: 0.7150 - 0.7110 - 0.7070.
Resistance levels: 0.7190 - 0.7235 - 0.7260.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'