Jerome Powell has finally finished speaking to Congress and hopefully, markets have now fully absorbed all that information.
Yesterday we really saw a bit of a retracement in the key markets as the expectation of a 25bp rate cut is now well and truly priced in. GOLD pulled back and the USD bounced in response to the all but certain cut that looks to be coming in July.
At the same time, US CPI ticked moderately higher, beating expectations. In what is a thin day of data to close out the week, the one major release looks to be PPI – another measure of inflation. Expectations are for a low 0.1% reading, but another strong result could mean some more upside in the Greenback.
At the same time, there is some Chinese trade data due out today, which will likely be coming during the start of the European session, so keep an eye out for that if you trade the AUD/USD.
Forex Signal Update
The FX Leaders Team finished with 2 wins from 4 signals as the USD retraced yesterday’s drop.
EUR/CHF – Active Signal
The EUR/CHF signal is looking really good here and as we are really honing in on our take profit. Given the lack of any major data today I would hope the chop alone would be enough to drag it over the line.
AUD/USD – Active Signal
The AUD/USD is quite weak on a fundamental level. The issue is really just the dovish FOMC. We have a fair bit of resistance behind us at 0.7000 so that is something we can really lean on here with this short signal.
BTC has fallen back considerably since tagging the $13,000 level. My bull case is looking a little weak at the moment as price clearly couldn’t hold the $12,000-$12,500 range either.
So, for the time being, we have to watch and wait and see if price can regather itself. Remember, we do have strong support below at $10,000 and so far $11,000 has held up OK.
Yesterday, profit-taking was the reason given for the collapse, which is understandable, but as I say long term I still am looking for a retest of those most recent highs.