EUR/USD Bullish Sentiment Increases: Long At 1.1390

Wojciech Matysiak MyFXspot.com

MyFXspot.com Trade Ideas

EUR/USD: long at 1.1390, take profit at 1.1590, stop-loss 1.1290
USD/JPY: sell at 110.90, take profit at 109.00, stop-loss 111.85
XAU/USD: long at 1300.00, take profit at 1360.00, stop-loss 1270.00

Market Overview
The Federal Reserve signaled it would not hike interest rates this year amid a slowing economy and announced a plan to end its balance sheet reduction program by September.
The U.S. central bank reiterated its pledge to be "patient" on monetary policy, and said it would start slowing the reduction of its holdings of Treasury bonds in May, lowering its monthly cap to USD 15 bn from USD 30 bn.
"It may be some time before the outlook for jobs and inflation calls clearly for a change in policy ," Fed Chairman Jerome Powell said.
Updated economic forecasts released at the end of the meeting also showed policymakers had abandoned projections for any rate increases this year, and see just one rate hike next year.

After the announcement, fed funds futures contracts began pricing in a better-than-even chance of a rate cut by next year. Powell pushed back on that view, saying the U.S. economy is in a "good place" and that the outlook is "positive."
The new economic projections released on Wednesday showed weakening on all fronts compared to the forecasts from December, with unemployment expected to be slightly higher this year, inflation edging down, and economic growth lower as well.
Fed policymakers project GDP growth to slow to 2.1% this year from the previous forecast of 2.3%, while the unemployment rate is forecast at 3.7%, slightly higher than the December projection.
Inflation for the year is now seen at 1.8%, compared to the Fed's forecast in December of 1.9%.
The new projections amounted to a wholesale downgrade of the Fed's outlook, with at least 9 of its 17 policymakers lowering their expected rate path and collectively shaving a full half of a percentage point off the expected fed funds rate at the end of this year.
EUR/USD's biggest one-day rise since January 25, helped bulls break above the 1.1420 Fibonacci, a 61.8% retrace of 1.1570 to 1.1177 fall. The thickening daily cloud, which currently spans the 1.1382-1.1409 region, underpins. Bulls should seek to avoid a daily close below the cloud base. We are long at 1.1390 for gains to our 1.1590 target.

Economic research and trade ideas by MyFXspot.com

Author

Wojciech Matysiak

MyFXspot.com

Wojciech Matysiak is a chief editor and chief economist of MyFXspot.com, currency market analyst and strategies provider.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.