- The US dollar has been all over the place during the trading session here on Wednesday, as President Donald Trump suggested that the Federal Reserve Chairman Jerome Powell could lose his job, according to the New York Times.
- That being said, he later stated that it was very unlikely to happen, and therefore the market shifted in the other direction.
- We have been pretty wild during the trading session, and it now looks as if we are trying to sort out what the longer-term direction is going to be for the US dollar.
Interest Rates
Interest rate spiked for the US dollar, as traders around the world sold off US debt. However, we have seen the market bounce back, and it suggests that we are looking for a continuation of the previous momentum for currency markets around the world. What I find interesting is that we are more likely than not to finish the day above the 0.80 level, which of course is a large, round, psychologically significant figure.
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By doing so, that is a good sign, but I am more interested in this market if we can break above the 0.81 level, which not only is an area that was previously support, but it also features the 50 Day EMA dropping toward it. If we can break above there, then I think we have a longer-term “buy-and-hold” set up occurring.
On the other hand, if we were to break down below the 0.7950 level, then I think we go looking to the 0.79 level, and then possibly even as low 0.78 after that. Keep in mind that there’s a certain amount of risk appetite that comes into this pair, as the Swiss franc is considered to be the ultimate “safety currency”, even more so than the US dollar which of course is widely followed for that as well. With that being said, I think you should continue to see quite a bit of noisy and choppy behavior.
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