And now look at 10-year yields that hit 2.17% beating a at Thursday’s low and the August, 11 low, standing at 2.18%.The bond market is hinting it doesn’t trust Fed, and doesn’t believe in tightening.
Meanwhile, gold reached $1,300.77, again confirming market doubts about rate hikes.
But later we saw a reversal both in gold and yen prices, showing the market is not ready to totally discount the Fed hawkish stance.
The area around 108.60/70 is a strong support. And it’s not easy to break. We saw the low of 108.68 last week. And we also saw the low of 108.69 in June.
Most probably the conflict in Washington will keep pressuring the pair, and we may even see the slide to April,2017 lows around 108.30. However, any attempts to break that level will be followed by deep corrections, so be careful!