In the foreign exchange market on Wednesday, the US dollar showed a slight shock consolidation trend. The US dollar index rose to 96.19, the lowest fell to 95.85, closing at 96.05. Europe and the United States rose to 1.1424, the lowest fell to 1.1378, closing at 1.1398.
US import prices fell for the second consecutive month in December, as the cost of petroleum products plummeted, and the strengthening of the US dollar suppressed the prices of other commodities, resulting in the largest annual decline in more than two years. The import price report reinforces the Fed’s expectation of a moratorium on interest rate hikes in the near term, as some economists believe that the Fed will not raise interest rates in the first half of 2019 in the context of low inflation and a slowdown in European economic growth. In addition to economic data, the sudden “face change” of Fed officials overnight also hinted that the Fed’s suspension of interest rate hike is expected to heat up: Kansas City Federal Reserve Chairman Esther George said it may be a good time to suspend interest rate hikes. Affected by this, the dollar’s gains were blocked. The euro/dollar fell during the day, as concerns over the eurozone economy weighed on the euro. The pound was steady, after the government led by British Prime Minister Teresa May passed the parliament’s vote of no confidence.
This week’s data shows that the German economy barely avoided the recession in the second half of 2018, and the European Central Bank (ECB) President Draghi warned that the euro zone’s economic performance was weaker than expected. The pound maintained its gains on Wednesday and was only slightly below the two-month high against the euro. After receiving support from party opponents and Northern Ireland allies, Teresamei successfully passed the parliamentary no-trust case. But after her agreement was rejected on Tuesday, she must now work hard with other parliamentarians on how to push for a Brexit. She suggested that talks be held with other political party leaders immediately.
May’s victory has greatly reduced the likelihood that her government will face elections in the coming weeks, and seems to have at least eliminated a trace of uncertainty in the Brexit chaos. However, she still faces the task of piece together an agreement that will satisfy both European and British parliamentarians and an agreement to meet the results of the 2016 referendum. Another option proposed by some to obtain a majority support from the cross-party is that the UK stays within the EU Customs Union. This agreement allows participating countries to develop common external tariffs and allow goods to be transported freely between these countries. This also seems tricky, as any related move may limit the UK’s ability to reach new trade agreements around the world, and this is one of the main reasons why some people have urged Britain to leave the European Union from the outset. In addition, European Commission President Juncker has so far refused to change the Brexit agreement reached in November last year. He said in a statement on Tuesday that Britain is now closer to “disordered Brexit.”
From a technical point of view, the US dollar index was supported above 95.85 on Wednesday, and the rebound was blocked below 96.20, closing at 96.05, which means that the dollar may rebound after a short-term correction. If the US dollar index is supported above 95.85 today, the target of the rebound will point to 95.20-96.40. Today, the short-term resistance of the US dollar index is 96.20-96.25, and the short-term important resistance is 96.35-96.40. Today, the short-term support of the US dollar index is at 95.85-95.90, and the short-term important support is at 95.70-95.75. Europe and the United States rebounded below 1.1425 on Wednesday, the callback was supported above 1.1375, closing at 1.1398, meaning that Europe and the United States may maintain a pullback after a short-term rebound. If Europe and the United States rebound today under 1.1425, the market callback target will point to 1.1375-1.1355. Today, the short-term resistance in Europe and America is between 1.1420 and 1.1425, and the short-term important resistance is at 1.1440-1.1445. Today, short-term support in Europe and America is at 1.1375-1.1380, and short-term important support is at 1.1355-1.1360.
Today, the US dollar is mainly short-term bargain-hunting. It breaks the stop loss. If there is a profit of 30 points or more, it will set a good stop to win. Before the US market opens, all pending orders withdrawn will be withdrawn. This strategy is suitable for margin and can be used as a reference.
US dollar index: You can buy at the lower limit of 96.35-95.85, effectively break the 20-point stop loss and target the upper limit of the range.
EUR/USD: You can sell at the upper limit of 1.1425—1.1355, effectively break the 30-point stop loss and target the lower limit of the range.
GBP/USD: You can sell at the upper limit of 1.2905—1.2795, effectively break the 40-point stop loss and target the lower limit of the range.
USD/CHF: You can buy at the lower limit of 0.9935—0.9880, effectively break the 30-point stop loss and target the upper limit of the range.
USD/JPY: You can buy at the lower limit of the range of 109.65-108.45, effectively break the 40-point stop loss and target the upper limit of the range.
AUD/USD: You can sell at the upper limit of 0.7210—0.7135, effectively break the 30-point stop loss and target at the lower limit of the range.
USD/CAD: You can sell at the upper limit of 1.3280—1.3205, effectively break the 30-point stop loss and target the lower limit of the range.
Gold: You can sell at the upper limit of 1296.00—1285.00, effectively break the $4 stop loss and target the lower limit of the range.
Silver: You can sell at the upper limit of 15.65-15.40, effectively break the stop loss of $0.10, and target at the lower limit of the range.