Brad Alexander
FX Large Limited
Last week we looked at the fallout on all US Stock Indices after Jerome Powell indicated no interest rate cuts in the near future.
This is a good opportunity to buy the dip, as we say, and investors may be doing that right now.
Price action bounced off support but you may want to wait for more confirmation.
We have a lot of economic news this week but the most important will be the CPI reports from Canada and the UK.
If inflation is lower, towards the goal of 2%, the central banks will be more inclined to lower interest rates, and vice versa.
This gives us some counter-trend entry opportunities as strength on CAD is mixed against all other currencies.
For example, if the news drives price action on NZDCAD higher, we may have an opportunity to go short.
The opposite can be said for USDCAD.
The news may affect GBP in the same way but we only have a couple of trend trading opportunities with most pairs in consolidation.
We see price action on GBPUSD at this upper trend line in a bearish channel and the stochastic oscillator overbought and moving down.
Price action on GBPUSD is clearly in a downtrend on the back of USD strength.
This may change based on Powell’s comments.
Speaking of the Bank of England, if CPI is lower than expected, there may be an opportunity to lower interest rates and drive the FTSE100 lower.
While we may offer market commentary based on fundamental or technical analysis, we do not offer trading advice and cannot be held liable for any decisions taken by viewers and readers of our material.
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