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Yellen's Testimony

Sensible and surprising
July 13, 2017

In a regular semi-annual appearance in Congress Fed chairman Janet Yellen reiterated that the US economy was getting stronger and that this might warrant a reduction of its balance sheet late this year.  She also ascribed low inflation, below their 2 per cent target, to temporary factors and said they were keeping a close eye on this.  But the real jolt came when she said, interest rates ‘would not have to rise all that much further to get to a neutral policy stance’.  A permanently lower water table, in other words.

 

Today in Brussels Chief EU Brexit negotiator Michel Barnier will meet for talks with Labour leader Jeremy Corbin, and heads of the devolved Welsh and Scottish governments Carwyn Jones and Nicola Sturgeon.

DAX 30

 

Lifted like all equity indices by a surprisingly dovish Janet Yellen rallying just beyond what we had allowed for and potentially turning momentum bullish.   

 

SHORT TERM TRADER:  Stopped out of my short position at a small loss.

 

POSITION TAKER:  Square.

FTSE 100

Poking its nose just above the parapet of the pivotal 7400 level and momentum might turn bullish today.

 

SHORT TERM TRADER:   Stopped out of my short position at a profit.

 

POSITION TAKER:  Short at 7325; stop above 7455.  First target 7125.

S&P 500

Yesterday’s burst might turn the MACD positive today.  However, we are still just below the all-time high.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

Scrambling a bit but managing to get a toe-hold on the top of the rectangle that had contained consolidation since May.  MACD rather mixed at the moment. 

 

SHORT TERM TRADER:  New small long at 1.2940; stop below 1.2800.  Target 1.3050.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Consolidating fairly comfortably at this year’s highest levels just about keeping the MACD bullish.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

Slightly skittish price action yesterday with a dragonfly doji.  However, the salient feature on this chart is the double top at 1295.

                            

SHORT TERM TRADER:  Small short at 1235; stop above 1230.  Target 1200.

 

POSITION TAKER:   Small short at 1262; stop above 1235.  Target 1200.