Greenback rallies after FED members increase US growth projections
FED moves markets
The US dollar rallied against most major currencies this week, after FOMC members raised their future growth projections for the US economy. The central bank kept interest rates unchanged during the September FOMC policy meeting, however, the so-called “Dot Plot” showed that members of the US central bank expected a higher rate of US economic growth in the future. FED Chair Jerome Powell also maintain his commitment to ultra-losse fiscal policy, with continued policy stimulus and low rates. Chair Powell also noted that the central bank still has other policy tolls available at their disposal. US equity markets sold-off abruptly after the September FOMC policy meeting, alongside gold and silver.
- XAUUSD is only bullish while trading above the $1,925 level, key resistance is found at the $1,980 and $2,020 levels.
- XAUUSD is only bearish while trading below the $1,925 level, key support is located at the $1,890 and $1,840 levels.
The British pound currency started to recover against a basket of currencies on the foreign exchange market this week, as British Prime Minister Boris Johnson was said to be considering a number of Brexit concessions. Sterling recovered above the 1.2800 level, and rallied towards the psychological 1.3000 area as traders were encourage by positive Brexit news. The Bank of England also kept interest rates unchanged this week, lending further support to the British pound currency. The FTSE 100 rallied to a three-week high this week as UK Chancellor Sunak offered further support for the those unemployed in the United Kingdom due to COVID-19, helping the index move back into solid positive territory for the month.
- The GBPUSD pair is only bearish while trading below the 1.3100 level, key support is found at the 1.2880 and 1.2770 levels.
- The GBPUSD pair is bullish while trading above the 1.3100 level, buyers may test towards the 1.3280 and 1.3350 resistance levels.
The euro currency suffered extreme volatility this week, and traded in a large range against the US dollar and the British pound. The EURUSD ranged between the 1.1700 and 1.1900 levels this week, as the US central bank policy meeting provoked profit taking, the triggering of stop losses, and wide-spread accumulation of the EURUSD pair from lower levels. The EURGBP pair also moved in wide trading range, between the 0.9270 and 9080 levels, as a key vote in UK Parliament and the Bank of England caused traders to cover short positions in the British pound currency.
- The EURUSD pair is only bearish while trading below the 1.1790 level, key support is found at the 1.1730 and 1.1640 levels.
- The EURUSD pair is only bullish while trading above the 1.1790 level, buyers may test towards the 1.1900 and 1.2000 resistance levels.
Bitcoin advanced to a two-week trading high this week, as the ongoing recovery from the $9,800 level gathered upside momentum. BTCUSD advanced above the $11,000 level overbullish news that cryptocurrency exchange Kraken had been granted a banking charter. The first cryptocurrency also benefitted as its network hash rate rallied to a new all-time record high. The futures and options market also turned more bullish towards Bitcoin, as a number of large bets were placed on Bitcoin reaching $20,000 before Christmas 2020. A number of important on-chain metric supported higher prices, and traders refusing to sell Bitcoin at current levels.
- The BTCUSD pair is only bearish while trading below the $10,500 level, key support is found at the $9,800 and $9,600 levels.
- If the BTCUSD pair trades above the $10,500 level, buyers may test towards the $11,100 and $12,000 resistance levels.