The USD weakened yesterday as the US House of Representatives is to begin an impeachment inquiry for US President Trump. House Speaker Nancy Pelosi announced on Tuesday that impeachment proceedings would begin and six different committees are to report to her on their findings related to Trump’s actions. Despite that Republican controlled Senate could provide a shield over President Trump, the stigma of an impeachment could cost him politically. Today’s meeting with Ukraine’s President Zelenskiy could provide further headlines. It should be noted that the impeachment process could delay a number of other issues such as the US-Sino negotiations. Also, President Trump’s rhetoric against the China, became harsh once again as he stated that he would not accept a “bad deal”. However, uncertainty is even greater as the US president stated over the UN general assembly podium that the future does not belong to globalists, promoting protectionism for the US. If the whole political uncertainty was not enough for the US dollar yesterday, the US consumer Confidence indicator for September dropped far wider than expected and casted doubt over the US economy’s prospects once again. Despite the USD correcting higher during today’s Asian session, we could see it weakening should uncertainty continue to dominate. EUR/USD rose yesterday breaking the 1.1000 (R1) resistance line, during today’s Asian session relented most of the gains made. As the pair relented gains made we could see it correcting lower if the USD regains some confidence. Should the bulls be in control, we could see the pair breaking the 1.1000 (R1) resistance line and aim for the 1.1050 (R2) resistance level. Should the bears be in charge, we could see the pair aiming if not breaking the 1.0950 (S1) support line and if (S1) is broken continue lower aiming for the 1.0910(S2) support level.
Kiwi jumps on RBNZ’s interest rate decision
NZD got some support today during the Asian session as RBNZ decided to remain on hold at +1.00% as was widely expected. The bank maintained a tone closer to a neutral position by stating that there remains scope for more fiscal and monetary stimulus, if necessary. The bank also stated that the reduction of the Official Cash Rate eased NZD exchange rates and that keeping it at low levels is needed, so that inflation accelerates and reemployment remains around its maximum sustainable level. Analysts tend to note that the decision was less dovish than expected and we would add that the outlook seems to improve for the Kiwi. NZD/USD rose yesterday and during today’s Asian session, breaking the 0.6300 (S1) resistance line, now turned to support. We could see the pair maintaining a sideways motion today, as it relented most of the gains made from the release of RBNZ’s interest rate decision, quite quickly. Should the pair find fresh buying orders along its path, we could see it breaking the 0.6340 (R1) resistance line and aim for the 0.6390 (R2) resistance barrier. Should the pair come under the selling interest of the market, we could see it breaking the 0.6300 (S1) support line and aim for the 0.6255 (S2) support level.
Other economic highlights today and early tomorrow
In today’s European session, we get CNB’s interest rate decision, while in the American session, we get the US new home sales figure and the EIA weekly crude oil inventories figure. As for speakers pleased note that ECB’s Benoit Coeure, ECB’s Sabine Lautenschlager, Chicago Fed President Charles Evans, BoE Governor Mark Carney, Kansas Fed President Esther George, Dallas Fed President Robert Kaplan are scheduled to speak. Also bear in mind President Trump’s meeting with President Zelenskiy.
NZD/USD H4
Support: 0.6300 (S1), 0.6255 (S2), 0.6205 (S3)
Resistance: 0.6340 (R1), 0.6390 (R2), 0.6440 (R3)
EUR/USD H4
Support: 1.0950 (S1), 1.0910 (S2), 1.0865 (S3)
Resistance: 1.1000 (S1), 1.1050 (S2), 1.1105 (S3)
