Dollar and Equities Mired in Technicals and Short On Motivation
• Rebounds for the USDollar and equity indexes have pushed markets into former technical boundaries
• A rebound in rate forecasts and speculative appetite lacks for commitment, which will make progress a struggle
• Greater technical influence and limited fundamental drive may bolster range options and trouble trend trades
The rebound for the US Dollar and global equities are very different in duration and momentum, but they are similar in their lack of genuine motivation. Rate expectations for the Fed are far from swinging back into to a clear hawkish bearing - we are unlikely to find clarification either way until we find a definitive event like an actual Fed move. For the recovery of stock markets, the rush of capital to shore up August's tumble carries more of a speculative dip-buying mark than the commitment of value investors. The lack of drive becomes a problem when we traverse ranges or recover lost ground and come upon meaningful technical boundaries. In the upcoming session, there are limited scheduled catalysts capable of forging the major fundamental winds necessary to transition from range to major breakout and certainly trend. How will that shape our next market move? What markets, currencies, pairs are better suited for prevailing conditions. We discuss that in today's Trading Video.
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