Fed Powell cut central bank cut rates on yesterday for the first time in ten years, due to continued uncertainty and a slowdown in the global markets. However, this wasn’t anything surprising as everyone and my Grandma expected the cut. However, it was his language that did surprise the Markets. He pretty much said, I’m throwing the markets a bone, but don’t necessary expect more bones.
This was a dovish tone in terms of more rate cuts and so the US dollar moved higher on the news as worldwide investors moved money into the currency (the US dollar) offering the greatest return. Although the US Feds cut rates, everyone around the world is cutting as well, but a faster pace.
So where is the US dollar heading next, lets go to the charts?
Bigger picture, the US dollar is moving towards the weekly demand at $99. This is key as there is room for the US dollar another $1 higher before potentially reversing. Which means Gold, Oil, Wheat, Soybeans, the Euro dollar, etc. should move lower as these assets are inversely correlated to the US dollar.
Based on the daily chart, potential turning points are between $99.40 and $100.40 as highlighted by the daily supply zones marked in white.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.