US Dollar Price Analysis and Chart:
- US dollar turning lower despite Thursday’s positive Fed speak.
- US bank earnings now come into focus.
Federal Reserve vice chair Richard Clarida gave the US dollar a boost Thursday, highlighting that the current US economic expansion will almost certainly become ‘the longest on record’ allaying fears of a slowdown going into the end of 2019. He added that with inflation ‘muted’ the current pause in monetary policy is warranted with the central adopting a patient stance as it waits for further data. The Fed also received good news with the latest US jobless claims release hitting a 49-year low.
The US dollar now seems to have brushed aside this positive commentary and is looking ahead to the start of the US bank earnings season, with JP Morgan and Wells Fargo the first cabs off the rank today. There are concerns that a poor set of quarterly banking results may highlight areas of weakness in the US economy, while guidance for the next quarter will also need to be closely watched. The only economic release of note this afternoon is the Univ of Michigan Sentiment report for April with the headline figure expected a fraction lower at 98.3 from a prior reading of 98.4.
The US dollar basket is nearing support around the 96.30 level ahead of the 50% Fibonacci retracement level at 95.87, a level that guards the 200-day moving average at 95.68. Three higher-lows at 95.15, 94.60 and 94.49 then come into play if any sell-off becomes entrenched.
USD Daily Price Chart (June 2018 – April 12, 2019)