The ICE US dollar index gained 0.6% reversing the declines from Thursday. President Trump said that the tariffs on China will stay for a significant period of time despite negotiations resuming next week. However, Washington noted it would be removing the tariffs in stages but could re-impose them upon violation of the trade agreement.
Risk Appetite Rises Following the Fed Meeting
After the FOMC signaled that there would not be further rate hikes this year, safe haven assets rallied. However, the gains were quickly reversed a day later as risk appetite found its way back. Equities posted strong gains with safe haven assets reversing the gains from the previous day as a result.
Can USDJPY Hold the Trend Line?
The dollar slipped as the currency pair briefly tested the rising trend line after breaking below the price level of 111.40. Price action was rejected strongly near the trend line, allowing USDJPY to pullback slightly higher. However, we could expect to see the bearish momentum resuming, in which case, the currency pair could extend to the lower support at 109.84.
Sterling Volatility Continues
The British pound continued to trade with volatility as the currency initially slipped to lows of $1.3000 before pulling back with some gains. Volatility rose as UK PM May sought an extension to delay Brexit. However, reports suggested that the EU could give the UK a nine-month delay if the Brexit deal due to be presented to the UK parliament was rejected next week.
Will GBPUSD Resume the Declines?
The currency pair has been drifting within the resistance area of 1.3312 and 1.2928 levels. With resistance firmly established, the downside could see the pound slipping to retest the lower support at 1.2928 – 1.2971. A retest of this level could, however, keep the currency pair drifting sideways for the moment.
Gold Gives Up Post-FOMC Gains
Gold was seen trading 0.27% lower on the day by Thursday’s close. The precious metal gave up the gains from after the FOMC late Wednesday. With the risk appetite rising, investors shed the safe haven assets in preference for risky assets.
Can XAUUSD Break the 1305 Support?
Gold prices briefly rallied to intraday highs of 1310.27 on Thursday but pulled back sharply to close on a bearish note. Price is still supported above the 1305 level of support. The risks are equally balanced at the moment. A retest to 1320 level to establish resistance still remains a possibility. However, a close below 1305 could trigger a move to the downside to 1290 support.