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USD
EUR/USD
The Euro crumbled to July 2020 low at $1.1529 on Wednesday before recovering to $1.1555 this morning, as a surge in energy prices fuelled worries that inflation could crimp economic growth while also prodding the Federal Reserve to act sooner to normalise policy.
GBP/USD
Cable halted its losing streak from $1.3542 to $1.3572, although IHS Markit/ CIPS UK Construction Purchasing Managers Index declined to 52.6 in September compared to market expectations of 54.0.
USD/JPY
The yen soared to 111.41 per dollar after U.S. Senate Minority Leader Mitch McConnell said his Republican party would support an extension of the federal $28.4 trillion debt ceiling into December.
USD/CAD
Loonie bolstered from 1.2650 to 1.2588 per greenback after crude oil rallied to a seven-year high before taking a breather from its recent torrid gains.
AUD/USD
Aussie rocketed to $0.7280, supported by optimism over the Sino-American war over Taiwan territory concurrence.
USD/ZAR
South African rand climbed to 14.98 per dollar, as risk sentiment and take-profit manifested ahead of Non-farm payrolls on Friday.
USD/MUR
The dollar-rupee rallied to 42.95(selling) after the Bank of Mauritius intervened on the local FX market to sell USD 25 million.
15:30 - EUR - ECB Publishes Account of Monetary Policy Meeting
16:30 - USD - Initial Jobless Claims
18:00 - CAD - Ivey PMI (Sep)
The dollar Index extends its intense rebound near the 94.00 threshold, clinching a new high for this year 2021 amid an earlier rate hike expectation and announcement of a nearing tapering asset purchase which clearly impacted the yield curves.
A tightening of monetary policy by the European Central Bank remains far in the future but ECB remains vigilant on its inflation figures yet to be released this Friday. This could give additional upward momentum on the USD in the near term and exerts additional selling pressure on the euro and the pound.
On the technical side, after a breach and close above the 100% retracement A-B-C (93.72 level) ,the greenback could easily approach the 113% level at 94.38 followed by 127% level – 94.98 level in the near term. Resistance at 96.47 (161.8%) remains key level to watch
1.3750 marked the completion of ‘wave e’ of the triangular retracement (wave B) of corrective move A-B-C for GBPUSD and abruptly, we saw fresh sellers entering the market below the 1.3600 levels yesterday.
As per Elliott wave principle, GBPUSD is battling around 1.3515 levels and higher inflation, Brexit and Petroleum concerns could exert further pressure on the pound towards 1.32 levels towards completion of wave C.
A breach and close above 1.3750 nullify this downward pattern.
