Trump Speech Leaves Investors Unimpressed
Dear Traders,
Well, as a trader, we were expecting much more from Donald Trump’s address to Congress. The market reaction to Trump’s speech was muted as specific details on infrastructure have been elusive. Trump promised to spend as much as 1 trillion dollars on infrastructure but he did not specify the timing and what spending he is referring to. While there were no details, Trump’s speech was notably less confrontational than his inaugural address. The U.S. dollar slightly strengthened following the speech but large market movements are still yet to come.
The pound sterling dropped below 1.2380 and we now expect the GBP/USD to trend lower towards 1.2260/20. The pound will now need to break below 1.2340 but before we could see accelerating bearish momentum it may head back towards a test of the current resistance at around 1.2430.
The U.K. PMI Manufacturing is scheduled for release at 9:30 UTC and could have a minor impact on the pound.
The euro depreciated against the greenback after failing to break above 1.0630. We will now wait for a sustained break below 1.0520 before anticipating further losses. Below 1.0520 we could see the EUR/USD tumbling towards 1.0450. On the upside we expect the 1.0620-level to lend a current resistance to the currency pair.
From the Eurozone, we have the German Unemployment report scheduled for release today at 8:55 UTC followed by the German Consumer Price Index at 13:00 UTC.
The most interesting piece of U.S. economic data will be the ISM Manufacturing Index due at 15:00 UTC which could have a significant impact on the dollar, provided that there is a surprise.
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