The U.S. dollar rebounded against the British pound and the euro following hawkish comments from Federal Reserve Chair Jerome Powell.
The Fed chairman said at a central banking forum in Sintra, Portugal, that more tightening is coming and that a broad majority of Fed officials support two additional rate hikes this year. Furthermore, he admitted that he doesn’t expect core inflation to get to 2.0 percent until 2025. This could mean no rate cuts next year. Tomorrow’s PCE deflator could be of particular interest in terms of more clarity on the inflation outlook. A surprise to the upside could bolster the greenback.
Many traders, however, remain doubtful about a renewed round of tightening.
GBP/USD: The cable sold off towards the 1.26-support. If the pair now slips below 1.2580, we will turn our focus to a next lower target at around 1.2510. Bulls on the other side, will keep tabs on prices above 1.2770 in order to buy pounds toward 1.2850.
Looking at our signal performance in June we can say that it has been a highly profitable trading month with +188 pips in the GBP/USD, +47 pips in the EUR/USD and +247 points in the DAX. We will therefore not reinvest our monthly profits during the last two trading days of the month.
We hope that you were also able to profit in the markets in June and wish you many more profitable trades to come.
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