There is still nothing new to report at this time. No trend, no breakout and consequently no sustained profit. It is thus difficult for day traders to benefit from directionless market swings.
When will a breakout finally come? This is the key question amongst traders and the answer could lie in President Trump’s speech to the joint-session of Congress today. His speech could be a catalyst as long as he provides enough details about his purported stimulus plan. During a speech on Monday, Trump promised that “we’re going to start spending on infrastructure, big”, without giving any details but promises alone are not enough to put an end to the dollar’s lethargy. With no reassuring details the greenback could suffer further pullbacks. Either way, we will prepare for higher volatility during his speech and hope for some larger market moves.
Trump’s speech is set for today at 21:00 ET (Wednesday morning 2:00 a.m. UTC).
The euro rose against the greenback but gains were limited to a high of 1.0630. EUR/USD bulls shall now wait for a break above 1.0620 and 1.0660 whereas bears may profit from a downside break of 1.0520. If Trump delivers details on his spending plans, we could see the euro free-falling against the dollar.
The British pound initially dropped against the dollar on reports that PM Theresa May’s team is preparing for Scotland to potentially call for an independence referendum. However, the impact was short-lived and the pound ended the trading day virtually unchanged against the dollar. We still wait for a break below the important support at 1.2380 in order to sell sterling towards 1.2250. On the upside, the 1.2550/70 level remains a crucial resistance for sterling bulls.
Before Trump’s address to Congress, we will watch important economic data such as the U.S. GDP figures, due at 13:30 UTC, followed by Consumer Confidence at 15:00 UTC.
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