A board member of the FOMC, Robert S. Kaplan has been speaking at the 2020 Business Outlook Summit in Dallas, Texas. Among notable comments made in his address are as follows:
“I expect that the US GDP will grow 2.25% this year”.
“My outlook for growth would be even higher were it not for the Boeing and coronavirus situations”.
“Having a little more trade stability will help global growth this year”.
The FOMC’s Kaplan has also noted that the ongoing coronavirus outbreak is “another wildcard” which could impact the price of US crude oil.
Kaplan was noted for his comment in a gathering held at the Council on Foreign Relations in New York in December 2019, where he said he did not see any interest rate changes pencilled for 2020. He has been a cautious supporter of lower rates in the US.
Kaplan’s comments did not affect price action on USD pairs in the forex market. The EURUSD continues to trade around its 2020 lows of 1.09987, having bounced off the 1.09963 support level earlier in the day.
The EURUSD has completed the measured move from the downside break of the rising wedge pattern seen on the daily chart. It is now testing the critical support at 1.09963, where previous highs of October 3-7, as well as earlier lows of November 10 and November 14 2019, were seen.
A breakdown of this price area could open the door towards the 1.09412 price level, where the pair previously saw lows on September 3/12 as well as October 9 2019. Below this area, 1.08841 (March 27, 2017, peak as well as May 2, 2017, low) could come into focus, has also formed a price trough on October 1 2019. A better-than-expected NFP report that adds to USD strength could make this price moves possible.
On the flip side, recovery of the pair could follow a price bounce from 1.09963, which then targets the resistance areas at 1.10630 and 1.11023. This move could follow a weak NFP report.
With a short calendar for the rest of Thursday, updates about the coronavirus from Asia as well as tomorrow’s NFP report could be the vital fundamental influences to round off the week.