The US dollar is not getting a lot of love these days, and while the first to react were commodity currencies, the euro eventually followed suit, breaking above the triangle.
It then continued to tackle the significant resistance line of 1.1375 but seems to struggle. The pair is now resuming its march forward, and a much more important line looms.
The doubts are creeping about whether the Fed is really insisting on hiking in December. While speakers such as Williams reiterated the 2015 liftoff mantra, we are beginning to hear different tunes from a more important member.
Stanley Fischer, the Vice Chair, has usually been leaning to the hawkish side. While he did repeat the talk about hiking in 2015, the central banker did stress this was not a “commitment†but merely an “expectationâ€. He also added worries about the global uncertainty and financial conditions.
He did note the disappointing jobs report and that export growth is slow and that everything, as always, is data dependent.
Here is how it looks on the chart. The next big level is 1.1460: it was the top of the recovery in the spring and also the highest post-Fed level for the pair. In the middle, we had the Chinese crisis in late August: euro/dollar then reached 1.1712, but didn’t sustain those highs.
In the latest podcast we explain how no news is bad news for the USD and more:
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