As most people had expected, following this week’s Federal Open Market Committee meeting members decided to keep interest rates unchanged, the key one at 1.75 per cent. They noted that at 1.9 per cent (highest since February 2017), the core personal consumption expenditure measure of inflation was almost at their 2 per cent target. They also said, ‘inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 per cent objective over the medium term’.
Hong Kong’s Monetary Authority Chief Executive Norman Chan today warned that local interest rates should gradually rise in line with US dollar ones so that the currency peg between the two can be maintained. As we noted last week they had to intervene several times buying Hong Kong dollars to keep it within its tight band.
DAX 30
Finally breaking above the 50 per cent retracement in an overdue burst of activity.
SHORT TERM TRADER: After such a long time, I’ve been stopped out of my short position.
POSITION TAKER: Stopped out here too for a small loss.
FTSE 100
Retracing a Fibonacci 76.4 per cent to 7570; remember that the maximum Fibonacci retracement is 78.6 per cent.
SHORT TERM TRADER: Considering going short around current levels.
POSITION TAKER: Square.
S&P 500
Reversing Tuesday’s little rally as the bottom of the giant triangle gets closer.
SHORT TERM TRADER: Small short at 2689; stop above 2725. Target 2580.
POSITION TAKER: Short at 2673; stop above 2725. First target 2560.
BRITISH POUND/US DOLLAR
An inverted hammer candle at the area where January’s rally started in earnest suggest cable is trying to stem the recent slide.
SHORT TERM TRADER: Square.
POSITION TAKER: Considering re-buying.
EURO/US DOLLAR
Another currency trying to stem the recent drop, but keep in mind it’s been 4 cents so far – a far from catastrophic move.
SHORT TERM TRADER: Still watching to a level at which to buy the euro.
POSITION TAKER: Square.
GOLD
An inside day yesterday, and potentially another one today, forming a tiny triangle on key support around 1310 as the market dithers at the prospect of breaking out of this year’s range. Note: some are suggesting the demand for gold is being boosted by Turkish people who want to hedge against inflation. The country has in fact being repatriating gold reserves for quite some time.
SHORT TERM TRADER: New tiny long at 1307; stop quite a bit below 1300. Target 1330.
POSITION TAKER: Square.
