USD Gets Support From Waller’s Comments

Dec 20 21, 09:28 GMT

USD got some support on Friday against a number of its counterparts as Fed Board Governor Waller underscored the Fed’s hawkish pivot as expressed in its last meeting. The Fed official practically endorsed the faster tapering of the Bank’s QE program while also implied the possibility for a rate hike as soon as March 2022 with two or three rate hikes in total for the year. Across the Atlantic the common currency tended to weaken against the USD but also against the pound for some time as the pandemic has a firm grip over the continent and Netherlands went into lockdown.

AUD also was on the retreat against the USD, as worries for the omicron variant tended to strengthen, threatening international trading conditions, while Aussie traders focus on the release of RBA’s last meeting due out tomorrow in the Asian session. GBP slipped against the USD on Friday practically erasing any gains made during the week and strong retail sales data for November were not able to counter the uncertainty created for UK’s economic outlook by the pandemic. It should be noted that earlier last week BoE had created substantial support for the pound by proceeding with its first post-pandemic rate hike and pound traders are expected to keep a close eye over December’s CBI trends for Orders due out later today.

Gold’s price seems to have stabilised somewhat on Friday after halting, at least for now, its upward motion. We tend to maintain a bias for a sideways motion between the 1793 (S1) support line and the 1815 (R1) resistance level. We must note though that the RSI indicator below our 4-hour chart is above the reading of 50 implying some bullish tendencies for the precious metal. Should the bulls actually take charge of gold’s direction we may see it breaking the 1815 (R1) line and aim for the 1830 (R2) level. Should the bears take the initiative, we may see gold’s price breaking the 1793 (S1) support line and aim for the 1770 (S2) level.

AUD/USD dropped on Friday breaking the 0.7170 (R1) level and aimed for the 0.7100 (S1) support level. We tend to maintain a bearish outlook for the pair given also that the pair’s RSI indicator has a downward slope and is aiming for the reading of 30. Should the selling interest be extended we may see the pair breaking the 0.7100 (S1) support line and aim for the 0.7045 (S2) level. On the other hand, should there be enough buying orders along its path we may see AUD/USD reversing course and aim for the 0.7170 (R1) level.

Other highlights for today

Today we note the release of UK’s CBI trends for industrial orders for the month of December while later on we note the release from New Zealand of the Westpac consumer Survey for Q4. During tomorrow’s Asian session we get from Australia RBA’s last meeting minutes.

As for the coming weeks

In the current week, we get on Wednesday the UK and US GDP rates for Q3, on Thursday US durable goods orders for November while on Friday the 24th we get from Japan November’s CPI rates. Next week, we get on Thursday the 30th of December UK’s Nationwide House prices and Switzerland’s KOF indicators both being for December, while on New Year’s Eve Chinas’ NBS manufacturing PMI figures also for December. On Monday the 3rd of January we get Turkey’s CPI rates and from the US we highlight the ISM manufacturing PMI figure, both for December. On Tuesday the 4th, we note the release of Chinas’ Caixin Manufacturing PMI figure for December, Australia’s RBA interest rate decision, while Switzerland and France are to release their December inflation rates. On Wednesday the 5th of January we note the release of the US ISM non-manufacturing PMI figure for December. On Thursday the 6th of January we get Germanys’ preliminary HICP rates for December. On Friday the 7th of January the crown is expected to be the US employment report with its NFP figure December among other high impact data

XAU/USD H4 Chart