For a PDF copy of this edition, click here.
The USD rally was halted in its tracks at the Powell press conference yesterday, which failed to confirm the market’s heavy lean for a more dovish outcome, as Powell dismissed inflation dip as down to “transitory” factors and refused to offer directional guidance on the next policy move.
This leaves breakout traders with little to look at for the USD pairs, though USDCHF is perhaps closest to make an interesting bid for a break, together with precious metals to the downside. Elsewhere, the AUD remains weak but needs to hold breaks lower after next Tuesday’s Reserve Bank of Australia meeting for bears to find confirmation that a breakdown is afoot. We put an EURAUD long on our signal tracker yesterday.
Gold is on the cusp of joining silver in posting new lows versus the US dollar, something that would likely require that the market continues to price lower odds for Fed rate cuts later this year, possibly on strong US economic data. On that account, we will watch the April ISM non-manufacturing survey and jobs report tomorrow for implications for the USD to break higher eventually in USDJPY, USDCHF and the precious metals. Breakout signal tracker
Today is the first day that the profit-taking window for EURSEK is coming into view and we will take profit on the signal here around 10.70 for a nice 3+ ATR as we would have taken profit ahead of the weekend anyway and nice to take off near the current highs. Our USDCAD long has come back from a near-death experience, though the outlook will only improve further if it can work back above 1.3500.