Talking Points:
- It’s been an eventful week across global markets and clarity has been evasive. The Fed hiked rates for the second time in 2018 while warning that two more were on the way; but this was offset by a report that began to circulate during the FOMC[1] press conference that the US will impose additional tariffs on China. The following morning’s ECB rate decision helped to reverse that USD[2] move, and the currency is now testing seven-month highs as EUR/USD[3] posed a deep bearish move, and this is being exacerbated by the prospect of even more political risk in Europe, this time from Germany.
- The primary takeaways from this week’s price action[4] has been US Dollar[5] strength while both the Euro[6] and US stocks took on added pressure. Given the context of these themes, this has the potential to continue that move of USD-strength, along with Euro-weakness. More questionable, however, is a deeper pullback in US stocks; we looked at a bearish reversal setup in the Dow Jones[7] earlier this week and that’s played out so far as the Dow is back-down and testing the 25k level ahead of the Friday open.
- DailyFX Forecasts on a variety of currencies such as the US Dollar[8] or the Euro[9] are available from the DailyFX Trading Guides page[10]. If you’re looking to improve your trading approach, check out Traits of Successful Traders[11]. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide[12].
