US central bank announcing massive bond buying scheme
The Federal Reserve announced a massive open-ended bond buying program this week as the US central bank attempted to stabilize financial markets. The new QE program will see the Federal Reserve buying an unlimited amount of US treasury bills on the bond market. The market reaction saw the US dollar falling across the board, global stock markets rising, and commodity prices soaring. Gold had one of the strongest reactions to the Federal Reserve’s announcement of a new bond buying scheme, with the yellow-metal soaring towards above the $1,600 resistance level.
- XAUUSD is only bullish while trading above the $1,550 level, key resistance is found at the $1,640 and $1,710 levels.
- If XAUUSD trades below the $1,550 level, key support is located at the $1,500 and $1,455 levels.
Bitcoin staged a rally back towards the $7,000 level this week as traders bought cryptocurrencies over fears that the Federal Reserve’s new stimulus measure could cause the US dollar to weaken. Bitcoin gained over ten percent on the week and bounced from the $5,600 technical area as soon as the US central bank announced its massive bond buying scheme. Data from the Chinese search engine, baidu, also showed that searches for the Bitcoin are exploding. Crypto enthusiasts are speculating that government stimulus measures will cause currencies to weaken and cryptocurrencies to gain value.
- The BTCUSD pair is only bearish while trading below the $6,000 level, key support is found at the $5,500 and $5,000 levels.
- If the BTCUSD pair trades above the $6,000 level, buyers may test towards the $7,000 and $7,800 resistance levels.
The euro currency gained ground against the US dollar as the newly announced QE program from the Federal Reserve boosted major currencies and weakened the greenback. The EURUSD pair fell to a multi-year low, around the 1.0630 level, before staging a major rebound back towards the 1.1050 resistance area Traders looked past record low PMI manufacturing and services data from the eurozone this week, and focused on the FED’s bond buying scheme. The EURUSD pair has had one of its most volatile trading months on record, and traded in a range of nearly 900 points.
- The EURUSD pair is only bullish while trading above the 1.0900 level, key resistance is found at the 1.1130 and 1.1240 levels.
- The EURUSD pair is only bearish while trading below the 1.0900 level, key support is located at the 1.0840 and 1.0780 levels.
Gold staged one its strongest weekly advances on record, as the Federal Reserve’s newly announced QE program provoked a major rally in the metals space. Gold surged above the $1,600 resistance level, after falling towards the $1,450 support level last week. Investors and traders bought gold as they anticipated that the US dollar currency will continue to weaken, due to the Federal Reserve’s unlimited bond buying scheme. Silver also enjoyed a strong rally this week, with the popular metal recovering above the $14.00 level.
- XAGUSD is only bearish while trading below the $15.00 level, key support is found at the $13.50 and $11.50 levels.
- If XAGUSD trades above the $15.00 level, buyers may test towards the $15.80 and $17.10 resistance levels.