Just a few hours ago, the head of the Federal Reserve of New York, William C. Dudley, told some interesting things that have sent the USD up north.
Mr Dudley has stated that “the current financial conditions are more harsh than in December”. Let me remind you that December is the month, when the FED, after a long wait, has increased the interest rates. Also, Dudley has stated that “currently is hard to say for certain, what the monetary policy will be in the future” and that “FOMC should be confident that the financial conditions reflect the actual state of affairs in the economy”. The current market unrest can be described as a signal for sentiment in regards to interest rate increase this year.
Although these are only speculations. On the following Friday, we will see the data regarding the labor market, which will set the tone for the FED’s further intentions. One thing is certain however – the strong USD is feeling “nervous”.
With the RUB, we test the strong broken level at 79.50, where we wait for a gradual descent to 71.60 level, with future intentions to buy. We can sell the pair with current prices at this point:
With NZD/USD, we have breached the resistance level of 0.6590-0.6600, and will try buying as candlestick signals form:
With the EUR/USD, we have reached the previously broken and tested ascending channel. From there, we can either bounce back or return inside the channel. We will continue monitoring the situation and will tweet later regarding further movements: