2022-08-30 • Updated
This Wednesday, the US Fed announces the interest rate and the monetary policy report.
In terms of the rate itself, no change is expected until the year 2023 – the rate will be held steady at 0.25%. The question is what happens in 2023. In this regard, there are two camps: optimists (they maintain that there are grounds to plan for rate hike in 2023) and “cautionists” (they abstain from affirming that there is certainty to increase the rate).
What are the factors in favor of the US economic optimism?
In fact, that’s the only fundamental factor, and it’s pretty inconclusive as “strong” is a very relative quality prone to change quickly with time. Largely, it is based on the same optimism that see a rate hike as the most likely scenario in 2023.
What are the factors against the US economic optimism?
Therefore, it is, basically, optimism (hopes) against realism (facts and figures). As the US Fed’s Chair Jerome Power is known for clinging to the latter, most observers believe that the coming Fed’s announcement is not going to provide much new information or interpretation of the US economic status - therefore, no major change of perspective is expected.
In such a neutral atmosphere, any subtle tone in the Fed’s commentary may move the USD in either direction. For example, the USD has been strong on the JPY lately, and hawkish outlook will support that strength lifting it to 109.50 and above. Alternatively, a dovish stance may bring it down to lower supports such as 108.00.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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