Good Afternoon,
Is it really back? Is Fundamental Data going to drive the markets? Today we saw dollar strength as the US Treasuries broke on better than expected economic data (see CHPM). But late in the day, we had money flow back into the US Treasuries as money came out of equities. So you saw USD strength early and weakness late on fundamental news - now this makes sense!!
Technically, (on a very short term chart), SPX broke a pennant to the downside. Could the selloff today follow through? Remember, this was the first real day of selling on a Friday in months and months and months. Usually, you have a follow through on Monday. But these aren't "usual markets". Plus, and this is a BIG plus, the Fed probably isn't done - so are buyers lurking in the equity markets? Is this another "seller's trap"? All good questions that seem to be giving us more and more volatility!
Looking ahead to next week, we have ISM Manufacturing and Services, Claims, ECB and BOE as well as a forecast of 165k for USD employment. I am sticking with the median and giong with a 165k forecast.
Now let's think about what if's. What if the economic data comes in much better than expected? What if it comes in worse than expected?
Happy Trading and Be Environmentally Cool
Coach Brian
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EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
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Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
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