Jerome Powell – Page 3

Relief Across The Market After Powell Pick

November 23, 2021/in General News & Updates /by MaimarFX

U.S. President Joe Biden decided to nominate Jerome Powell for a second term as Federal Reserve chair and thus, calmed the markets. So, what we got was the status-quo scenario and a stronger U.S. dollar as Biden’s pick bolstered expectations that interest rates will climb next year. Lael Brainard was elevated to vice chair, making Powel and Brainard a powerful duo.

The greenback traded higher and pushed other counterparts lower in turn.

EUR/UD: As long as the euro remains below 1.13, we expect further losses.

GBP/USD: The cable broke below 1.3390. We see a next lower target at 1.3350 and if 1.34 serves as a lower resistance we anticipate another leg down toward 1.33.

DAX: Prepare for a test of the crucial 16000-support. Below 15980 bearish momentum could accelerate with a lower target seen at 15800. Back above 16210 we may see a run for 16400.

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Fed Taper a Foregone Conclusion, Focus Instead on Taper Pace

November 3, 2021/in General News & Updates /by MaimarFX

It’s FOMC decision day and a taper announcement seems a forgone conclusion. The question among investors is rather when the FOMC will complete its asset purchases (speed of tapering) and when they will start to raise interest rates.

Most economists expect the Federal Reserve to reduce bond purchases by $15 billion every month and complete the taper by mid-2022 (eight months).

As Fed policy makers have said that they want to end the taper before moving to possible rate hikes, most attention will be paid to the taper pace. In case of a quicker end to the tapering, the U.S. dollar will rise.

The focus will also be on the Fed’s language regarding inflation. If the committee retains the language that elevated inflation is “largely reflecting transitory factors”, the dollar will weaken. If today’s FOMC statement is however more hawkish, stating that inflation is lasting longer than expected, the dollar will strengthen as the market speculates on earlier rate hikes.

Speaking of rate hikes and even though the market speculates on a faster rate hike path, diverging from the forecast of Fed policy makers, economists expect the Fed to suggest a liftoff when the unemployment rate falls to 4 percent.

Traders prepare for heightened volatility around the time of the FOMC statement today at 18:00 UTC.

EUR/USD technical view: If the euro falls again below 1.1540, chances of a bearish 1.15-breakout increase with lower targets seen at 1.1480 ad 1.1450. On the upside, price breaks above 1.1640 and 1.1670 will spur bullish momentum towards 1.1720.

GBP/USD technical view: Below 1.3580 we will turn our focus to lower targets at 1.3550 and 1.3450. On the upside, the 1.3750-area could serve as a resistance whereas a break above 1.3780 could attract more buyers towards a higher a target at 1.3820. However, larger fluctuations will be expected tomorrow, which is why the cable could be reluctant to big price movements today.

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Wird die Fed den falkenhaften Erwartungen des Marktes gerecht werden?

September 22, 2021/in General News & Updates /by MaimarFX

Es war eine Art des sogenannten „Turnaround-Tuesday“, beziehungsweise ein Umkehr-Dienstag denn der U.S. Dollar gab infolge seiner jüngsten Aufwertung der letzten Tage etwas nach. Dennoch schien der Markt lediglich eine Verschnaufpause zu nehmen im Vorfeld der Federal Reserve Entscheidung heute Abend. Die Stimmung am Markt könnte daher bis zur Entscheidung um 20:00 Uhr ‚gezügelt‘ sein.

Es wird erwartet, dass die Fed eine, später in diesem Jahr stattfindende, Reduktion ihres Stimulus signalisieren wird. Der Fokus richtet sich zudem auf die ‚Dot-Plot‘- Zinsprognosen der Zentralbank. Die heutige FOMC Entscheidung könnte allerdings knifflig sein, denn die Fed nähert sich zunehmend der Straffung der Anleihekäufe inmitten einer Verschlechterung des globalen Wirtschaftsumfeld wobei Schätzungen über ein rückläufiges BIP Wachstum in den USA, eine relativ hohe Inflation und steigende Covid Fälle eine Bedrohung darstellen.

Was wird genau erwartet?

Marktakteure erwarten eine falkenhafte Fed mit einem deutlichen Hinweis auf den Taper, welcher noch vor Jahresende beginnen wird infolge einer formellen Verkündung im November.

Das Falken-Szenario: Sollte die Fed denken, dass es Zeit ist zu straffen und zeigen die Dot-Plot Prognosen zudem eine erste Zinsanhebung in der zweiten Jahreshälfte von 2022, so wird der Dollar steigen.

Das Tauben-Szenario: Enttäuscht die Fed die Erwartungen des Marktes und gibt an, dass die Konditionen für eine Straffung noch nicht gegeben sind und spielt Fed Präsident Jerome Powell zudem den Countdown für eine Zinsanhebung runter, so wird der Dollar stark fallen.

Trader werden ihr Hauptaugenmerk auf die Zinsprognosen um 20:00 Uhr und die Pressekonferenz um 20:30 Uhr legen.

EUR/USD: Klettert der Euro über 1.1765, rechnen wir mit einem Test der 1.1770-1.18 Kursregion. Eine aktuelle Unterstützungszone befindet sich weiterhin zwischen 1.17 und 1.1660. Für einen bullischen Ausbruch bedürfte es einem Anstieg über 1.1850, was das Sentiment zugunsten der Bullen verändern könnte.

GBP/USD: Das Paar befindet sich weiterhin in überverkauftem Territorium und schwebt über 1.3650. Fällt der Cable unter 1.3630 und ferner unter 1.36, so sehen wir ein nächstes tieferes Ziel bei 1.3550. Auf der Oberseite schauen wir auf eine Widerstandszone zwischen 1.38 und 1.39.

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Der Inhalt des Beitrags spiegelt die persönliche Meinung des Autors wider. Dieser übernimmt für die Richtigkeit und Vollständigkeit keine Verantwortung und schließt jegliche Regressansprüche aus. Dieser Beitrag stellt keine Kauf- oder Verkaufsempfehlung dar.

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Will The Fed Meet The Market’s Hawkish Expectations?

September 22, 2021/in General News & Updates /by MaimarFX

It was a kind of turnaround-Tuesday with the U.S. dollar edging down after its most recent acceleration. However, it seemed that the market was just taking a breather ahead of today’s Federal Reserve decision. The sentiment could remain constrained until the decision at 18:00 UTC.

The Fed is expected to signal a reduction in stimulus later this year. The focus will also be on the dot plot rate hike forecasts. However, the FOMC announcement could be a tricky one as the Fed moves increasingly closer to scaling back asset purchases amid a deteriorating global economic backdrop where slowing GDP growth estimates in the U.S., relatively high inflation and rising Covid cases are posing a threat.

What is expected today?

Market participants expect a hawkish Fed with a strong hint that the taper will begin before the end of the year following a formal announcement in November.

The hawkish scenario: If the Fed thinks it is time to taper and if the dot plot shows a first rate hike in late 2022 the dollar will rise.

The dovish scenario: If the Fed disappoints the market’s expectations, stating that taper conditions haven’t been met and if Fed Chair Jerome Powell downplays the countdown for a rate liftoff, the dollar will sharply fall.

Most interesting for traders will be the dot-plot forecast due for release at 18:00 UTC and Powell’s press conference at 18:30 UTC.

EUR/USD: If the euro climbs above 1.1765, we expect the pair to test the 1.1770-1.18 price area. A current support zone remains intact between 1.17 and 1.1660. For a bullish breakout we would need a rise above 1.1850 which would shift the sentiment in favor of the bulls.

GBP/USD: The pair still remains oversold while hovering around 1.3650. If the cable falls below 1.3630 and further 1.36, we see a next lower target at 1.3550. On the upside we look at a resistance zone between 1.38 and 1.39.

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Will Powell Send A Hawkish Message Despite Delta?

August 27, 2021/in General News & Updates /by MaimarFX

It might be a big day for traders and big decision for Federal Reserve Chair Jerome Powell who will have to decide which message he conveys. Even if the delta variant creates further uncertainty, the Fed must decide whether the costs of extending the commitment to maximum stimulus have come to outweigh the benefits. The risk of bubbles and financial instability is growing, so it makes sense to phase out quantitative easing. This would be positive for the U.S. dollar which could climb to fresh highs on such confirmation. In the opposite case, if the Fed delays plans to taper its bond purchases as expected, we could see a sell-off in the greenback, pushing other counterparts higher in turn.

Powell’s highly awaited symposium speech is scheduled for today at 14:00 GMT.

Going into today’s event, chances are slightly in favor of the dollar this morning.

EUR/USD

The pair marked a short-term resistance at around 1.1775. Above 1.1780, we see a next target at 1.1815. Breaking above 1.1860 could see a test of 1.1890 and possibly even a run for 1.1940. Dollar bulls will wait for a renewed break below 1.1725 and more importantly below 1.17 in order to push the pair lower towards the crucial 1.16-support.

GBP/USD

The pair rebounded and as long as it holds stable above 1.3650-10, we pencil in higher targets at 1.3830 and 1.39. An upside break of 1.3910 could spur bullish action towards 1.40. Breaking, however, significantly below 1.36 could pave the way for a sell-off towards 1.34.

We wish you good trades and a beautiful weekend.

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No Big Movements For Traders

July 29, 2021/in General News & Updates /by MaimarFX

The FOMC statement came in with a somewhat hawkish tone, stating that policymakers are closer to tapering. Federal Reserve Chair Jerome Powell’s press conference, however, depressed the U.S. dollar in the aftermath of the statement as he said that there was still some way to go. While no decision on taper timing had been made, Powell said officials “expect further progress” but they are “clearly a ways away” from liftoff. Economists now expect that a reduction in asset purchases (taper) will not happen until early 2022.

The next gathering of the FOMC is September 21-22 but before that, Powell will speak at the August 26-28 conference in Jackson Hole. Fed chairs have sometimes used the venue to signal policy shifts.

As for day trades there was nothing to gain yesterday with momentum in the Forex market still lacking. We therefore recommend traders staying on the sidelines during these low-liquidity periods, taking a break from the markets and adjusting risk exposure. Better trading conditions will come after the summer doldrums.

Traders will watch the U.S. GDP data today at 12:30 UTC but chances of big market moves are small.

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No Surprises Expected From The Fed

July 28, 2021/in General News & Updates /by MaimarFX

It is widely expected that the Federal Reserve will maintain a steady policy course when it concludes its two-day FOMC meeting today. Fed officials are not expected to signal a reduction in support for the U.S. economy but will debate how to scale back massive bond purchases when the time comes.

Officials have pledged to maintain bond buying until the economy shows “substantial further progress” on inflation and employment as it recovers from the pandemic.

Meanwhile, pressure on Chair Jerome Powell to start the taper sooner rather than later has probably been eased by the recent slide in bond yields, as investors worry the spreading delta coronavirus variant could sap the recovery.

While we do not expect any major surprises from today’s policy decision, we prepare for potential price breakouts in both directions.

GBP/USD

The cable surged towards 1.39 and traders wonder whether this could be the limit. Despite the fact that the pair entered overbought territory in short-term time frames, it would need an unambiguously hawkish Fed statement to derail the recent bullish movement. In other words, as long as the pair holds steady above 1.37, chances remain in favor of a breakout above 1.39 and a run for 1.40.

EUR/USD

As expected, the euro strengthened towards 1.1850 and we anticipate bullish momentum to continue towards 1.1970-1.20, unless there is a hawkish surprise from the Fed which is less likely today. On the downside, the 1.1730-1.17 support remains intact.

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Ereignisreiche Woche für den Greenback

July 12, 2021/in General News & Updates /by MaimarFX

Der beste Performer vom letzten Freitag war das Britische Pfund welches die 1.39-Marke gegenüber dem U.S. Dollar testete. Viel der jüngsten Aufwärtsbewegung im GBP/USD kann dem schwächelnden Dollar geschuldet werden, welcher aktuell aufgrund nachlassender Erwartungen bezüglich Federal Reserve Zinsanhebungen und kollabierenden U.S. Treasury Renditen nachgibt.

Was den Greenback anbetrifft, so wird diese Woche eine Ereignisreiche sein, denn es stehen der U.S. Inflationsbericht (Dienstag), sowie die halbjährliche Anhörung von Fed Präsident Jerome Powell vor dem Kongressausschuss (Donnerstag) an. Beide Events könnten als Impulsgeber für größere Bewegungen am Markt dienen. Es besteht das Risiko, dass Marktakteure selbst eine höhere Inflation und einen entsprechenden Renditenanstieg abtun werden, seitdem die Fed weiterhin auf einem lediglich temporären Inflationsanstieg beharrt. Dies könnte Gewinne im Dollar möglicherweise begrenzen, auch wenn der Bericht mit einer höheren Lesung überrascht.

Das letzte Protokoll des FOMC Treffens auf der anderen Seite, zeigte, dass innerhalb des Komitees noch eine Menge an Fragen offen seien bezüglich des Zeitraumes wann die Knappheiten am Arbeitsmarkt und Lieferengpässe, welche zum Anstieg der Inflation geführt haben, überwunden seien. Jerome Powell könnte auf seiner Anhörung vor dem Kongress den Ausblick eventuell näher beleuchten. Die Anhörung ist am Donnerstag für 9:30 Uhr Ortszeit in Washington angesetzt.

GBP/USD

Die Erholung im Cable war bis zu einem Hoch bei 1.3910 begrenzt und wir werden nun auf einen Bruch oberhalb von 1.3920 warten um von einem Test der 1.3940-50 Region und eventuell sogar einem Lauf bis zum gewichtigen 1.40-Widerstand auszugehen. Damit die Bärendynamik wieder an Fahrt gewinnt, müssten wir wohl entweder einen Rutsch unter 1.3760 auf der Unterseite oder einen Test von 1.40 auf der Oberseite sehen.

EUR/USD: Der Euro erholte sich in Richtung von 1.19 nachdem der 1.1780-Level vorerst seinen Halt bewiesen hat. Wir werden jetzt auf einen Ausbruch über 1.1910 achten, welcher die Bullendynamik bis 1.1970 anheizen könnte. Auf der Unterseite könnte der 1.18-Level als Unterstützung dienen, doch sollte diese brechen, läge ein nächstes Ziel bei rund 1.1760.

Schauen wir bereits voraus auf die nächste Woche, so könnte die Entscheidung der Europäischen Zentralbank am 22. Juli doch noch einige interessante Ausführungen und Veränderungen bereithalten. Das nächste EZB Treffen galt am Markt noch bis vor kurzem als relativ ereignislos inmitten der Sommerflaute. „Es wird ein wichtiges Treffen sein“ und Investoren sollten sich auf eine neue Leitlinie in zehn Tagen einstellen, sagte EZB Präsidentin Christine Lagarde in einem Interview für Bloomberg Television in Venedig am Sonntag. Es könnte also für Euro Trader doch noch etwas Volatilität nächste Woche drin sein.

DAX

Der Index stoppte seinen Fall kurz vor 15300 und erweiterte damit die untere Grenze seiner jüngsten Seitwärtsspanne bis 15300. Ein Bruch der steigenden Trendlinie bei 15350 könnte jedoch in einem Bruch der Seitwärtsspanne münden mit einem nächsten tieferen Ziel bei 15100. Bullen werden auf der Oberseite ein Auge auf einen Ausbruch über 15800 haben.

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Der Inhalt des Beitrags spiegelt die persönliche Meinung des Autors wider. Dieser übernimmt für die Richtigkeit und Vollständigkeit keine Verantwortung und schließt jegliche Regressansprüche aus. Dieser Beitrag stellt keine Kauf- oder Verkaufsempfehlung dar.

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FOMC Event: Price Targets To Watch Out For

June 16, 2021/in General News & Updates /by MaimarFX

Today will be an important trading day for traders as it may be the last one before the summer doldrums providing bigger market moves.

All eyes will be on the Federal Reserve decision at 18:00 UTC followed by Fed Chair Jerome Powell’s press conference 30 minutes later.

The base case scenario is dovish: While the U.S. employment gains are solid, the Fed has not seen the hoped-for job gain of more than a million, which could have been a condition to begin scaling back monetary support. Instead, labor market reports for the months of April and May have been disappointing relative to previous forecasts, strengthening the Fed’s argument that the job market is still a long way off from the “substantial further progress”. The Fed could therefore wait for further improvements before starting the taper debate. In this case, the U.S. dollar could fall on the back of disappointment.

The hawkish surprise: In the unlikely case of the begin of the discussion to reduce asset purchases, the greenback will rise against other peers.

The focus will also be on the Fed’s dot-plot forecast. It is expected that the forecast will shift to an earlier rate hike expectation in 2023 from 2024 back in March. This would be dollar-positive.

Let’s take a brief look at the technical picture:

GBP/USD

The pound dipped below 1.4070 but held firmly above 1.40. If the 1.40-support remains unbroken, we anticipate a rebound towards 1.4150. For significant price breakouts, we would need to see either a bullish break above 1.42 or a bearish break below 1.40. Above 1.42 we will shift the focus to a higher target at 1.4290, whereas below 1.40, next targets could be at 1.3920 and 1.38.

EUR/USD: Not much has changed in this pair. As long as the euro trades between 1.2230 and 1.2080 there is nothing new to report. A rise above 1.2250 could open the door to further gains towards 1.2350, whereas on the downside, a fall below 1.2080 could lead to further losses towards 1.20 and probably even 1.1940.

We wish everyone good trades today.

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Here Is When The Fed Could Signal Tapering – But Not Today

April 28, 2021/in General News & Updates /by MaimarFX

The FX market appeared to be taking a breather at the beginning of the week with market participants cautious ahead of today’s Federal Reserve policy decision. Consequently, there was nothing to gain for FX traders but this could possibly change today with traders bracing for higher volatility around the Fed’s statement.

The Federal Reserve is expected to announce it will begin trimming its monthly asset purchases before the end of the year but it will leave asset purchases untouched for several more months.

Nonetheless, the most likely scenario is that today’s FOMC decision will be an uneventful one since Fed President Jerome Powell is unlikely to hint at the timeline for tapering at this meeting, given that U.S. economic data has only just begun to pick up momentum and the U.S. Treasury market has calmed. But as the economic recovery continues, the Fed could soon send a signal.

In the unlikely event of a hawkish signal during Powell’s press conference or if he provides any clues about the tapering timeline, we will get a strong market reaction with the U.S. dollar rising. However, the Fed is not expected to follow the Bank of Canada that surprised the market with a hawkish tilt last week.

As for the tapering, most economists expect a taper to happen in the first quarter of next year with the Fed starting to signal tapering from the July semi-annual testimony.

EUR/USD: The pair remained in a tight trading range, increasing the chances for price breakouts to either side. For bullish momentum to accelerate we need to see a renewed break above 1.2115 or on the downside, a test of the current support zones at 1.20 or 1.19. If the pair remains however unable to overcome the 1.2110-barrier, chances are in favor of the bears with the focus being on the 1.1950-1.19-support zone.

GBP/USD: The cable failed to gather momentum and remained in a narrow sideways trading range between 1.3930 and 1.3850. If the pair falls below 1.3850, we will focus on a lower target at 1.38. A break below 1.3770 could even open the door to a deeper correction towards 1.3670. Sterling bulls on the other side, will have to wait for a significant break above 1.3930 and further 1.3960 in order to expect a higher target at 1.4070.

Good trades everyone!