The US dollar finds support after President Donald Trump’s decision to take the U.S. out of the nuclear deal with Iran, raising the risk of conflict in the Middle East and expanding the effect for global oil supplies and the global economy.
The dollar rose as the yield on 10-year U.S. Treasury notes jumps above the important 3% level to the highest level in two weeks.
The strength in oil helps the Canadian Dollar to be higher.
“The Iran Deal is defective at its core. If we do nothing, we know what will happen. In just a short time, the world’s leading state sponsor of terror will be on the cusp of acquiring the world’s most dangerous weapons. This horrible one-sided deal should have never, ever been made.” Trump announced on Tuesday
This stressed the Euro as The UK, Germany and France declared a statement in response to the decision. The three countries are still in their “continuing commitment” to the JCPoA Iran deal, and they invited the US to “avoid taking actions obstructing its full implementation by all other parties to the deal”.
Sterling is under pressure as investors wait for any dovish announcement in tomorrow’s meeting.
Traders will focus on the inflation report to give any support to the pound as a rate hike is expected in the coming months.
All eyes will be on US PPI today which is forecast at 0.2%.
We’ll also be watching the official cash rate for the reserve bank of New Zealand. RBNZ is expected to leave its Overnight Cash Rate (OCR) in its monetary policy meeting unchanged as traders focus on the declaration of inflation to anticipate any rate hike soon.
On the daily chart, the price has reached the support zone of 0.7035-0.6965.
The price is near the uptrend line from the low of 2008.
An AB=CD pattern is formed in a smaller frame.
Provided by divergence in RSI, the price is expected to get back up again to the resistance zone of 0.715-0.7185.
On the daily chart, we can see that the price bounced from the support area of 80.35-81.2.
A well-noticed head & shoulders reversal pattern is shaped. The price is at the second shoulder waiting for a break of the lower trend line as shown.
Followed by oversold on RSI, the price is expected to get back up again to the resistance area of 84-84.35.
On the daily chart, the price bounced from the support zone of 1.0475-1.0545. Breaking, also, a descending trend line followed by a break of the descending channel.
The price is moving sideways between levels 1.066 & 1.073.
The harmonic pattern improves the chance of a bullish continuation. Therefore, if the price breaks 1.073, it is assumed to visit 1.084.