U.S. Dollar Plunged as U.S. President Trump stated that would prefer Fed to keep rates low while Turkey is heading into a crucial referendum. Euro and U.K. Pound are preparing to enter Easter holidays mood and remained near their opening levels against G10 for the day.
U.S. Dollar Plunged as Trump Prefers Low Interest Rate Policy
U.S. dollar dropped severely on Wednesday as U.S. President Donald Trump commented that he would prefer Federal Reserve to keep interest rates low as the dollar is getting strong. Moreover, Trump stated that he wouldn’t label China a currency manipulator. On the top of that, the U.S. budget declined to $-176B in March while it was expected to be $-150B. Trump’s comments in combination with the lower than expected monthly budget statement, sent the USD/JPY more than 90pips lower for the day, at a five-month low, while EUR/USD ended Wednesday at the highest level of the last four days. However, on the days ahead, greenback can take advantage of the Easter holidays in the most European countries that will ease volatility and gain the lost ground. Later in the day, the producer price index for March, the weekly jobless claims and the preliminary Michigan consumer sentiment for April are coming out, while tomorrow the limelight of the day will be the U.S. consumer price index and retail sales reports.
USD/JPY – Technical Outlook
It was another negative day for the U.S. dollar as it plummeted almost 2% so far this week against the Japanese yen and slipped below the 110.10 critical level. The USD/JPY pair is approaching our first target at 108.50 that we mentioned in the analysis yesterday (see technical analysis here: https://bit.ly/2oWJgyu) or moreover towards the 107.50 support barrier.
The technical indicators, as well as the moving averages, are signalling for further bearish movement. The pair is developing below the three SMAs (50, 100 and 200) on the daily chart. The RSI indicator is following a negative territory and is approaching the oversold area. Meanwhile, the MACD oscillator created a bearish crossover with its trigger line and is strengthening below the zero line.
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