Dollar Busted Higher Post Rate Decision, Eyes Gain

Dollar Busted Higher Post Rate Decision, Eyes Gain

By: Simon Furman | Where To Trade | On:30-10-2014 04:16
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Key Highlights

  • US dollar was seen trading higher during the late NY session and after the fed interest rate announcement.
  • Fed kept the interest rate at 0.25%, but ended the QE3 as expected by the market.
  • Central back acknowledged the strength in the labor market, and hopes that it might continue in the long term.
  • Pairs such as EURUSD, GBPUSD and AUDUSD collapsed after the release and trading around important support levels.
  • Commodities, especially SILVER managed to hold the downside and surprisingly back up from the $17.00 support area.

 

AUDUSD

Yesterday, the AUDUSD pair was seen surging higher as it climbed towards the 0.8900 level. However, the fed interest rate decision spoiled the party, as the pair moved lower sharply after the release. The pair moved more than 100 pips lower after the release and currently managing to hold the 76.4% fib retracement level of the last move from the 0.8717 low to 0.8909 high. However, there are several important bearish signs on the hourly chart, including the fact that the pair is now trading below the 100 and 200 moving average. A full test of the last low cannot be denied moving ahead. However, there is a major hurdle as there is a bullish trend line formed, which might protect the downside in the pair.

Intraday Support Level – 0.8740

Intraday Resistance Level – 0.8790

  • Overall, as long as the pair stays below the 100 MA it might continue to move lower.
  • Next level of buying interest can be seen around the last low of 0.8710.

 

Where To Trade - AUD/USD - 30-10-2014

 

If somehow the pair managed to correct higher, then it might find sellers around the 100 and 200 moving averages confluence area. So, selling rallies around the mentioned confluence area might not be a bad option in the near term.

 

SILVER

SILVER showed a lot of resiliency yesterday, as the downside was very limited. It dived towards an important trend line, which has acted as a support on a number of occasions for SILVER. It traded as low as $16.99, and currently trading back higher. Currently, it is trading around the 100 moving average on the hourly chart which is acting as a hurdle for more upside. To be very precise, it is struggling to clear the 50% fib retracement level of the last leg from the $17.36 high to $16.99 low. We need to see how SILVER trades in the coming hours. A failure to close above the 100 MA might ignite selling pressure one more time in the short term. On the upside, the next hurdle is around the 200 MA.

Intraday Support Level – $17.00

Intraday Resistance Level – $17.20

  • Buying dips around the bullish trend line looks moving ahead.
  • A break below would invalidate the bullish view in the near term.

 

Where To Trade - SILVER - 30-10-2014

 

On the downside, SILVER must hold the last low of $17.00 else we might see a nasty spike lower. In that situation, SILVER might test the $16.80 level where it could find buyers to hold the downside.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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