Past Performance: Past Performance is not an indicator of future results.
The left chart shows the USDOLLAR daily timeframe. The candlesticks have pulled back but remain in the bullish area, between the upper blue and upper red bands. Yesterday, Fed Chair Powell testified in front of the Banking Senate Committee. The Fed has pivoted. Concerning the word "transitory" in describing inflation, Mr. Powell said that it's "probably a good time to retire that word." Moreover, the Fed is considering a speed up in the taper process, which will end the asset purchasing program earlier than previously communicated.
The right chart shows the H1 USDOLLAR chart. The greenback initially spiked up on the Fed Chair's comments but has settled back down. Given his hawkishness and the position of the daily chart, the hourly indicators are of interest. If the EMAs cross positively and the stochastic moves towards the 80 level, short-term market participants may be attempting to align themselves to the pivot. However, if the EMAs continue downwards, the market may be doubting this timing, given the emergence of the omicron variant.
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.