February has been all about consolidation for the GER30
GER30 has bounced off of the support around the 15,260 level (green shaded horizontal). Since the beginning of February, it has been threatened seven times. Every time it has been defended.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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GER30 has bounced off of the support around the 15,260 level (green shaded horizontal). Since the beginning of February, it has been threatened seven times. Every time it has been defended.
The FOMC minutes show that the Fed sees a slowing of inflation, which may support a peak in the federal funds rate this year. However, the minutes were penned before notable data. January’s jobs report was strong, showing an increase of 517,000 in nonfarm payrolls. Inflation was also higher than consensus, with the headline CPI printing at 0.5% m/m.
GBPUSD has charted a lower peak followed by a lower trough on the daily time frame (left). This is a defined down trend. Yesterday, GBPUSD appreciated following its flash PMI beats. However, there is no follow through today.
Markets fell yesterday, with the US30 declining 1.67% on the day. The decline shows concern regarding the Fed’s rate hiking path, with the “higher for longer” paradigm pricing in, as the flash PMIs came in hotter than expected.
The Canadian trimmed CPI y/y came in at 5.1%, less than the previous 5.3% y/y and below the consensus of 5.2% y/y. This measures consumer inflation but excludes the 40% most volatile items. Core retail sales also declined, printing at -0.6% m/m/ against the -0.1% expected.
Last week’s CPI and PPI release show a stickiness to inflation. The market seems to be coming around to the Fed’s view whilst several Fed officials talk up interest rates. This week the Fed’s minutes will be released on Wednesday and Friday sees the all-important core PCE release. Join FXCM senior market specialists Russ and Nik as they discuss these and more.
It is reacting slower than expected, but the NAS100 IS reacting to higher real rates.
FXCM’s USDOLLAR has charted a lower peak followed by a lower trough. This is a defined down trend.
Sticky inflation persists. The prices of median goods and services have ticked up. This slow change of prices is a headache for the Federal Reserve. They will worry that inflation expectations have anchored to an elevated level.
The AUDUSD charted a spinning top yesterday. This is a candle of uncertainty. Bulls tried to take price up and bears tried to take price down. Neither was successful, with AUDUSD closing fairly flat on the day.
UK headline inflation dropped to 10.1% with a 4% drop in petrol and diesel prices in January. The core inflation rate decreased below 6%. The continuous disinflation trend in goods categories due to improving supply chains and lower consumer demand is linked to the decline in core inflation.
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