US Dollar, USD, EUR/USD, GBP/USD, USD/JPY, Crude Oil – Talking Points

  • The US Dollar snapped decrease after the Fed pulled again on hike ensures
  • APAC equities have been barely stronger regardless of huge positive aspects on Wall Street
  • All eyes are on US GDP right this moment. Will a giant quantity raise USD to resume its uptrend?

The US Dollar dived because the market re-adjusted fee hike expectations from the Fed. The anticipated 75- foundation level (bp) hike by the Fed led to EUR/USD and GBP/USD getting the biggest boosts going into the New York shut. The Japanese Yen has been the largest gainer towards the US Dollar in Asia right this moment.

Fed Chair Jerome Powell mentioned in remarks after the choice that the abstract of financial projections (SEP) from June have been unchanged. He mentioned that the US isn’t at the moment in a recession and that future hikes shall be knowledge dependent.

He didn’t rule out one other 75 bp raise, however the Fed will now not be giving ahead steering on fee strikes.

The perceived deceleration within the fee hike path noticed Treasury yields soften out the curve to 10-years, whereas notes past there added just a few foundation factors. Wall Street exploded upward with the Dow, S&P 500 and Nasdaq increased by 1.37%, 2.62% and 4.06% respectively of their money session. Futures are at the moment a contact decrease.

APAC fairness indices are barely within the inexperienced, with Hong Kong’s Hang Seng Index the exception. It is down lower than 1%. As anticipated, the Hong Kong Monetary Authority (HKMA) lifted charges by 75- foundation factors right this moment to match the Fed hike.

Crude oil went increased on the softer greenback and was buoyed by stock knowledge. The Energy Information Administration (EIA) reported that holdings within the strategic petroleum reserve fell by 4.5 million barrels. This was a bigger lower than forecast and takes the reserve all the way down to 422 million barrels

Commodities are usually increased throughout the board via the Asian session. Most notably, iron ore has had a very good run, it was up over 5% at one stage. Gold is buying and selling close to US$ 1,736 an oz..

After German CPI right this moment, the main focus shall be on US GDP figures, the place the market is anticipating annualized progress of 0.5% within the second quarter. Quarterly PCE knowledge can be due for launch and the market is searching for a 4.4% QoQ rise within the three months via June. This is the Fed’s most well-liked measure of value progress.

The full financial calendar could be considered right here.

USD (DXY) Index Technical Analysis

The USD (DXY) index fell in a single day however was unable to maneuver beneath the 3-week low of 106.11 and this stage could present help. Below there, the break level of 105.59 may present help.

The 10-day easy transferring common (SMA) seems to be about to cross beneath the 21-day SMA. This would create a Death Cross and it’d point out that bearish momentum may evolve.

On the topside, yesterday’s peak of 107.43 could supply resistance.

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for

To contact Daniel, use the feedback part beneath or @DanMcCathyFX on Twitter

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