News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • US Markets at the Close $NDX 12464.0 -1.73% $SPX 3768.49 -1.34% $DJI 30924.14 -1.11%
  • USD/JPY stronger during trade, now pushing towards 108 level $USDJPY https://t.co/GemouFGvHF
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.02% US 500: -0.03% Germany 30: -0.52% FTSE 100: -0.53% France 40: -0.71% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/jsQ36v1JJy
  • USD/CAD put in a test at the 1.2500 psychological level last week, but bulls following the falling wedge for topside breakouts may have to wait for a bit longer. Get your $USDCAD market update from @JStanleyFX here:https://t.co/81i2hiJT53 https://t.co/G0tuoC80CH
  • Gold continues its decline, now trading below $1,700 $XAUUSD https://t.co/PbAygJY9Yt
  • $USDJPY in full on bull mode longer-term, a really strong breakout from the falling wedge formation https://t.co/FDaE6Qzbfj https://t.co/23ubngiXnQ
  • USD/CHF sharply higher, extending recent gains https://t.co/sEukWUYhBU
  • Canadian Dollar Price Forecast: USD/CAD Holds Support as USD Drives https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2021/03/04/Canadian-Dollar-Price-Forecast-USDCAD-USD-CAD-Holds-Support-as-USD-Drives.html $USDCAD https://t.co/pw7XkF7F7n
  • USD/RUB sharply higher as President Biden places sanctions on Russia $USD $RUB https://t.co/44yZ3qi0ci
  • AUD/USD lower off the back of Fed Chair Jerome Powell's speech https://t.co/Sh1WWLEsKE
Fed Confident Despite US Economic Data Disappointments Mounting

Fed Confident Despite US Economic Data Disappointments Mounting

Tyler Yell, CMT, Currency Strategist

Talking Points:

On Wednesday, the Federal Open Market Committee Raised Rates to 1.00-1.25%, which was a 25bp hike and said they anticipate another hike before the year is over. The rate hike was not a shock, but sticking to their expectations to raise rates through 2019 that puts the terminal rate at 3.00%. This persistence in expected hikes caused USD strength to emerge as Yellen noted that the Fed continues to see conditions favorable in place for inflation to rise.

While the data in the US is recently weak, it is going to be difficult for the market to fight the Fed who expects to continue raising rates. While Yellen noted that the Fed would avoid the risk of hiking too rapidly, they are likely working toward carefully pulling the Fed Funds Rate (FFR) as far away from the zero-bound as possible so that when there is another recession, the Fed will have “bullets” in their gun.

As Yellen spoke, there was a reversal of sorts in G10 FX in favor of the USD. USD/JPY would eventually halve its intraday session drop, USD/CAD would eventually move to new daily highs. The question that many will likely ask after multiple weeks of USD weakness is whether we’ll see a pop after the drop? It’s a question worth asking, and if we see strength in favor of the USD against commodity currencies like the Canadian Dollar, which recently pushed toward 2017 highs and the New Zealand Dollar. Traders can also watch the Dollar Index (DXY) to see if the price can break above two recent lower highs at 97.53/78, there could be a pop indeed in store for USD. However, if the price remains below resistance, I will continue to focus on downside extension targets at 95.85-94.83.

Would you like to know what our top minds are watching over the long-term in markets?

JoinTylerin hisDaily Closing Bell webinars at 3 pm ETto discusstradeable market developments.

Closing Bell’s Top Chart: June 14, 2017, EUR/USD pulls away from strong resistance at 1.13

Fed Confident Despite US Economic Data Disappointments Mounting

Tomorrow's Main Event:GBP Bank of England Rate Decision (JUN 15)

IG Client Sentiment Highlight:NZD shorts jump on belief strongest G10 currency is overcooked

The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment, and how client positioning can lead to trade ideas. If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell@dailyfx.com.

Fed Confident Despite US Economic Data Disappointments Mounting

NZDUSD: Retail trader data shows 18.0% of traders are net-long with the ratio of traders short to long at 4.55 to 1. In fact, traders have remained net-short since May 24 when NZDUSD traded near 0.69967; price has moved 3.8% higher since then. The percentage of traders net-long is now its lowest since Jan 15 when NZDUSD traded near 0.71269. The number of traders net-long is 38.5% lower than yesterday and 42.2% lower from last week, while the number of traders net-short is 1.4% lower than yesterday and 41.2% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests NZDUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger NZDUSD-bullish contrarian trading bias.(Emphasis mine)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES