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Fed hiked three times this year, which is at least one hike more than markets expected at the start of the year. FOMC's dot plot implies three hikes in 2018, markets are again not that hawkish. With so much money in the system and stock market seemingly engineered to go just up, federal funds rate could end up much higher than anyone expects. On the other hand, stock market bears have grown surprisingly quiet.
al_dcdemo's Blog
Yen poised to break out of the tight range
Since post-FOMC move from 108.80 to 111.80, Yen's been trading in an 80-pip range. BOJ released Summary of Opinions from their most recent meeting which confirmed that the bank is not planning any tightening in monetary policy just yet, at least not publicly.
USD/JPY has been sandwiched between 200 and 100 DMA, and whichever will give way first will suggest direction for the next leg. An upside break appears more likely at the moment with 112 and 112.50 the targets. Conversely, a break below 111…
USD/JPY has been sandwiched between 200 and 100 DMA, and whichever will give way first will suggest direction for the next leg. An upside break appears more likely at the moment with 112 and 112.50 the targets. Conversely, a break below 111…
EURo looks heavy above 1.1150
Euro traded to a new seven-month high last week after weak U.S. inflation and retail sales data. The spike was reversed few hours later on hawkish FOMC decision. PMI data at the end of the week will be closely watched by market participants.
The pair has been trading sideways for about a month. December - May channel top, late May low and 1.11 big figure level combine to a strong support area, followed by 1.10 - 1.1050 (early May high, 50 DMA). 1.13 remains a formidable upside barrier.
The pair has been trading sideways for about a month. December - May channel top, late May low and 1.11 big figure level combine to a strong support area, followed by 1.10 - 1.1050 (early May high, 50 DMA). 1.13 remains a formidable upside barrier.
USD/JPY stalls after 250 pip rally
After a rally from the lows near 108.80 post FOMC, USD/JPY took a breather on Friday. Whether the rally will continue also depends on Fed speakers and whether they will side more with Kashkari/Kaplan (cautious) or with Yellen (hawkish).
100 DMA near 111.80 is the initial hurdle ahead of the 2017 trendline resistance near 112.50. 200 DMA (110.70) is the immediate support . 110 - 110.50 area should now hold if bulls are to remain in control. Otherwise, we'll probably see a retest of the year's low…
100 DMA near 111.80 is the initial hurdle ahead of the 2017 trendline resistance near 112.50. 200 DMA (110.70) is the immediate support . 110 - 110.50 area should now hold if bulls are to remain in control. Otherwise, we'll probably see a retest of the year's low…
U.S. dollar recovers after hawkish FOMC decision
Fed's FOMC was surprisingly hawkish yesterday. They hiked federal funds rate by 25 basis points, as expected, and outlined strategy for reducing their balance sheet. FOMC chair Yellen told reporters that the balance sheet adjustment could begin "relatively soon".
Just a couple of hours before the FOMC decision, both inflation and retail sales reports came in weak and markets sold U.S. dollar on speculation that the FOMC will postpone hiking until data improves. The dollar recovered and followed …
Just a couple of hours before the FOMC decision, both inflation and retail sales reports came in weak and markets sold U.S. dollar on speculation that the FOMC will postpone hiking until data improves. The dollar recovered and followed …
USD/CHF consolidates below 0.97 ahead of the FOMC
Swiss franc is one of the best performing major currencies this year. Euro strength and U.S. dollar weakness are both supporting this. SNB meets tomorrow and no change is expected from them for at least as long as ECB keeps rates on the floor.
USD/CHF encountered some demand ahead of 0.96 before pulling from the lows. If that goes, 0.95 area looks stronger and might be backed by SNB. 0.97 - 0.975 is the initial resistance. 0.98 - 0.985 is another one.
USD/CHF encountered some demand ahead of 0.96 before pulling from the lows. If that goes, 0.95 area looks stronger and might be backed by SNB. 0.97 - 0.975 is the initial resistance. 0.98 - 0.985 is another one.
Kiwi falls as FOMC remains constructive
As widely anticipated, FOMC made no changes to interest rates. The accompanying statement didn't change much. Perhaps the key takeaway is the ease with which the committee dismissed slowing in growth during the first quarter as likely transitory. That confirms June hike is firmly on the table.
With RBNZ expected to remain sidelined for a considerable period of time, New Zealand dollar is slowly losing its interest rate advantage over the U.S. dollar. Kiwi topped out near 0.7050 in April and the …
With RBNZ expected to remain sidelined for a considerable period of time, New Zealand dollar is slowly losing its interest rate advantage over the U.S. dollar. Kiwi topped out near 0.7050 in April and the …
Aussie rallies as nobody on the FOMC wants to hike
FOMC left interest rate corridor unchanged and provided no explicit guidance as to the next hike. That was largely expected but what stood out was that there was not a single hawkish dissent.
Australian dollar needed little excuse to rally. Release of better than expected Trade Balance and Building Approvals coincided with the break above 0.76. The pair extended its gains in the morning and broke above 2011 - 2016 support/resistance line. 0.76 should now act as a support.
Australian dollar needed little excuse to rally. Release of better than expected Trade Balance and Building Approvals coincided with the break above 0.76. The pair extended its gains in the morning and broke above 2011 - 2016 support/resistance line. 0.76 should now act as a support.
Kiwi pulls back ahead of the FOMC
New Zealand quarterly Employment Change came in as expected, at 0.8%. Unemployment Rate rose to 5.2% on the back of higher Participation Rate (70.5%). Labour Cost Index slightly disappointed at 0.4%.
Kiwi added nearly five cents from the low of 0.6860 in late December and pulled back nearly a full cent after the release of otherwise solid labour market data. Profit-taking after yesterday's surge to 0.7350 and ahead of the FOMC might have been a bigger factor.
Kiwi added nearly five cents from the low of 0.6860 in late December and pulled back nearly a full cent after the release of otherwise solid labour market data. Profit-taking after yesterday's surge to 0.7350 and ahead of the FOMC might have been a bigger factor.
Loonie stabilizes near 1.34
Canadian dollar sold off strongly against the U.S. dollar after FOMC upgraded tightening path and Yellen used the word "gradual" only twice at the last week's press conference. Oil prices remain firm after OPEC and non-OPEC production cut deals.
The pair sprang from the strong support zone (May - November trendline, 200 DMA, 2009 high) below 1.31 and almost completely retraced the decline from the first two weeks of the month in two days before stabilizing ahead of 1.3455 (Q3 2015 high). Looks b…
The pair sprang from the strong support zone (May - November trendline, 200 DMA, 2009 high) below 1.31 and almost completely retraced the decline from the first two weeks of the month in two days before stabilizing ahead of 1.3455 (Q3 2015 high). Looks b…