The following article was written by ATFX Chief Analyst of Asia Pacific, Martin Lam.
Last night, Federal Reserve Chairman Powell attended the hearing. He said that the US economy has maintained strong economic growth in the first half of the year and welcomed the Fed’s continued “gradual” rate hike, which is a hawkish remark. Although the speech did not indicate the time to raise interest rates, the market generally expects that the Fed will keep interest rates unchanged on the day of the August 1 interest rate decision, and the interest rate hike will reach 80% in September. Then evaluate the rate of interest rate hikes in December.
The Fed is moving towards a rate hike, but the US has implemented multiple trade protection since June. Whether the United States can achieve its desired goals and keep economic growth strong is still unknown. The economy will still be challenged in the second half of the year. When investing, we must pay attention to the outlook and performance of each economic data, grasp the actual experience and grasp the changes in the market.
Today the market focuses on European currencies. At 16:30 pm, the UK released inflation data such as the June Consumer Price Index (CPl) and the Retail Price Index. The performance of the data will have an impact on the UK retail sales data for June, and will also have an impact on UK interest rate resolutions. In addition, the Eurozone announced the Consumer Price Index (CPl) and construction output in June, and the data also reflected the inflation and monetary policy orientation in the Eurozone. Focusing on US ElA crude oil inventory data in the evening will affect the development of crude oil prices. Finally, it is recommended to pay attention to the 2:00 am tomorrow morning, the Federal Reserve announced the economic situation “Beige Book”, the report content can truly reflect the performance of the US economy. For the performance of the US stock market, the dollar trend and commodity prices have an important impact.
The Fed chairman’s speech has a stimulating effect on the US dollar and indirectly affects the decline in Europe and the United States. In the afternoon, if the Eurozone CPl sees growth, it is expected to benefit more euros. If the short-term euro remains above 1.1645 and 1.1625, the euro may have a chance to test 1.17. The “Beige Book” of the United States tomorrow morning will show the impact of the economy and US dollar.
The Bank of England’s president’s speech and the UK’s employment data failed to support the further rise of the pound. The most important speech of the Fed chairman, the dollar rebounded and the pound fell. In the next two days, the UK will release inflation data and retail sales respectively. If the data is stable, it will help to strengthen the pound to develop above 1.3100. The “Beige Book” of the United States tomorrow morning will show the impact of the economy and US dollar.
The speech of the chairman of the Federal Reserve Board raised the market’s interest rate hike in the United States. The dollar rose and the Swiss franc fell. If the US “Beige Book” will show the economic, production and employment market conditions tomorrow morning, if the slowdown can lead to a fall in the US dollar, the Swiss franc up. By technically, the Swiss franc will continue to follow the direction and pace of the euro.
The Fed’s president’s hawkish remarks appeared, and the dollar was bullish and the yen was dropped. The dollar rose to a six-month high against the yen, and the rise in the Nikkei is one of the reasons. However, if the US “Beige Book” shows a slowdown in the overall US market tomorrow, the US dollar and the US Dow fell, and the USD/JPY has the opportunity to follow the decline.
Affected by the speech of the chairman of the Federal Reserve Board, the Australian dollar was dropped. The comments of the Chairman of the Federal Reserve Board, the market has gradually digested the impact and the trend has increased. It is necessary to pay attention to the “Beige Book” to show the impact of the US dollar.
In the second quarter of New Zealand, CPl maintained a growth of the New Zealand dollar. Affected by the speech of the chairman of the Federal Reserve Board, the New Zealand dollar fell. After the adjustment, the New Zealand dollar re-established support and the positive the New Zealand dollar.
This morning, the APl crude oil inventories increased. It is expected that ElA crude oil inventories will increase tonight and will continue to be negative for the Canadian dollar. But we must pay attention to the US “Beige Book” tomorrow morning to show the impact of the US dollar and the trend of Canadian dollar.
The euro rebounded against the pound, mainly due to market expectations that Bank of England Governor Carney is about to speak and important economic data for the next two days. The market has gradually digested. If the performance of the UK and Eurozone data in the afternoon is only in line with market expectations, it is believed that the EUR/GBP will adjust to decline.
Technically, the short-term movement of the euro against the Swiss franc has doubled and weakened, and the euro may have a chance to adjust against the Swiss franc. If the adjustment is expanded, the target can be tested at 1.1620.
The speech of Federal Reserve Chairman Powell led the market to estimate that the Fed tightened its monetary policy, was short of gold, and was bearish on the expectations of the medium and long-term trend. Fortunately, the Fed is not in a hurry to raise interest rates next month, and short-term gold may have a chance to rebound. Pay attention to the US “Beige Book” report tomorrow morning at 2am, which will affect the US dollar. If the report shows an overall market slowdown, gold has a conditional rebound.
US crude oil futures
The US EIA crude oil inventory report will be released tonight . If the inventory is shown to be falling as same as API last night, over supply will affected decreasing the price of oil.
7540 / 7740 resistance
7050 /6820 support
As mentioned The Fed chairman Powell speech to deliver semi-annual testimony, the sentiment changed and transferred to crypto currencies investment. The Bitcoin broke the resistance at 6820 and reached 7388 last night. Now the bitcoin maybe keep 7050 support and keep the trend upward.
The above is for reference only; the market is risky and investment needs to be cautious. Trading must included risk management! Wish Happy trading!
Information provided by ATFX, Chief Analyst of Asia Pacific: Martin Lam
Registered Australian Accountant/ Certified Professional Manager / Certified Financial
Advisor Experienced Investor / Media Market Commentator Martin Lam has Over 17 years’ experience in global investment market. Familiar with the worldwide stock indices, precious metals such Gold and Silver, Crude oil and Forex. He operated Martin Currency Trading Company and had partnership with a number of well-known international financial corporations and institutions. Before he join ATFX, he was TeleTrade Greater China development and Sales Director. Mr. Lam attends Hong Kong Now TV and China CCTV finance channel once a week. He also had regularly invited by different media, such as DBC Digital Financial Channel, Hong Kong Economic Times, The Standard, Ming Pao to share his experience to trade in Forex, Precious metals, Crude oil and worldwide stock indices. Contact: [email protected] or wechat: ATFX_China
Legal: ATFX is a trading name of AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is : the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent & the Grenadines.