Weekly Trading Forecast: Are Markets Underestimating Fed Resolve?
Financial markets have been defined by fading Fed rate hike bets in recent weeks. An FOMC rate decision and second-quarter US GDP data now threaten that narrative.
The US Dollar (via DXY Index) finds itself back at fresh yearly lows, but two major events over the coming days – the FOMC rate decision and the US GDP report – could finally offer the greenback a chance to slow its descent and stabilize.
The Euro faces a telltale period ahead as the bulls’ defiance of a dovish ECB is tested with the passage of top-tier economic data and official commentary.
The British Pound came into this week with legitimate prospects for bullish continuation. But with inflation printing below expectations, that bullish move may be on pause for the foreseeable future.
The Japanese Yen may continue to appreciate against its U.S. counterpart next week should the Federal Open Market Committee (FOMC) soften its hawkish outlook for monetary policy.
The Australian Dollar market can look forward to a US monetary policy call and official local consumer price data, but the RBA may now be a more obvious focus than either.
NZD/USD broke to upside this week and returned to levels last seen in September 2016 on Fin Min comments
The Canadian Dollar has been strengthening against its US cousin since early May and that trend will most likely continue as long as further interest rate hikes remain probable.
Chinese Yuan Forecast: To Retrace or to Advance, That is a Question around the Yuan
Looking forward, Chinese regulators’ guidance, July FOMC decision, as well as U.S. data prints are more likely to add mixed moves into the pair; both retracement and breakout are possible for the pair next week.
Prices posted the largest weekly rally since May with the advance now eyeing slope resistance. Here are the updated targets & invalidation levels that matter next week.
Global Equities Forecast: Fed Rattle or Help the S&P 500?; DAX in Danger, Nikkei Coiling
Crude Oil is pushing away from price resistance as the market anticipates the OPEC review in St. Petersburg will not lead to further supply cuts.
See what live coverage is scheduled to cover key event risk for the FX and capital markets on the DailyFX Webinar Calendar.
See how retail traders are positioning in the majors using the IG Client Sentiment readings on the sentiment page.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.