Federal Reserve cuts interest rates and maintains economic projections
The Federal Reserve cut US interest rates by twenty-five basis points this week, with the central bank hinting that the latest rate cut may be the last of this year. The market reaction saw the US dollar index moving higher as the Federal Reserve’s dot-plot suggested that the US central bank see the US economy remaining steady. Two FED members actually dissented to the latest US interest rate reduction, as they voted against other policy members. The FOMC policy statement also noted that the central bank will only cut rates further if US economic conditions start to worsen.
- The EURUSD pair is only bearish while trading below the 1.0980 level, key support is found at the 1.0960 and 1.0880 levels.
- If the EURUSD pair trades above the 1.0980 level, buyers may test towards the 1.1160 and 1.1210 resistance levels.
UK rates steady
The Bank of England kept interest rates on hold this week as the central bank remained cautious ahead of the United Kingdom’s departure from the European Union on October 31st. The Bank of England noted that they may need to increase interest rates to stop the UK economy from over-heating if the UK strikes a Brexit deal with the European Union. The British pound currency climbed to a fresh monthly trading higher against the US dollar this week, with the GBPUSD pair edging ever closer to the 1.2600 level.
- The GBPUSD pair is only bearish while trading below the 1.2385 level, key support is found at the 1.2350 and 1.2300 levels.
- If the GBPUSD pair trades above the 1.2385 level, buyers may test towards the 1.2570 and 1.2600 resistance levels.
Altcoins finally moved higher this week, as many of the top cryptocurrencies moved away from extremely depressed trading levels. Ethereum moved above the $200.00 level and enjoyed strong double-digit weekly trading gains, as the second-largest cryptocurrency advanced towards the $230.00 level. Litecoin also enjoyed strong buying demand, with the LTCUSD pair edging towards the $80.00 level. The BTCUSD pair failed to rally alongside the broader cryptocurrency market, as bearish fundamental news about a potential Bitcoin ETF weighed on the largest cryptocurrency.
- The BTCUSD pair is only bullish while trading above the $10,000 level, key resistance is found at the $11,000 and $11,700 levels.
- The BTCUSD pair is only bearish while trading below the $10,000 level, key support is located at the $9,400 and $9,100 levels.
Oil prices suffered extreme volatility this week, following a major drone strike on Saudi Arabia’s largest oil production facility. WTI oil prices moved over ten percent higher at the start of the week, while Brent crude oil soared to $70.00 per barrel. Fears about a potential shortage of oil also caused the Norwegian Krona and Canadian dollar currencies to move higher, while the Japanese yen also received a strong bid. Oil prices eventually settled down as Saudi Arabia noted that its oil production could return to full capacity faster than previously estimated.
- USDJPY is bullish while trading above the 107.30 level, key resistance is found at the 108.30 and 108.80 levels.
- If the USDJPY pair trades below the 107.30 level, key support is located at the 106.90 and 106.50 levels.