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Market Outlook: Fed on trade in testimony

Jerome Powell tests the water
July 18, 2018

At a testimony in the US Senate yesterday, Fed governor Jerome Powell got involved in a discussion on trade and tariffs.  Asked about their effect on economic growth he said, ‘’in general, countries that have remained open to trade, that haven’t erected barriers including tariffs, have grown faster, they have higher incomes, higher productivity’’.

Ten minutes after the scheduled release time, the Office for National Statistics released UK employment data.  Average earnings in the three months to May dipped 0.1 per cent to 2.5 per cent annualised; while unemployment remained unchanged at 4.2 per cent, labour force participation inched to another new record high at 75.7 per cent.  A speech by Bank of England governor Mark Carney yesterday, part of a Treasury Select Committee hearing, also suffered from delays.  Some bright spark dreamt up the idea of holding the session at the Farnborough Airshow (no doubt with corporate hospitality thrown in) and City AM says, ‘an online audio-only stream was plagued by technical difficulties before shutting down altogether’.

DAX 30

Not what we had expected as we break and settle above the 12635 level.  Note though that the commodity channel index is at overbought levels and still might turn down this week.

 

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

 

POSITION TAKER:  Square.

FTSE 100

Just too tedious and the commodity channel index cannot cope either. 

 

SHORT TERM TRADER:   Short at a couple of levels; stop above well 7710.  Target 7400.

 

POSITION TAKER:  Small short at 7799; stop well above 7800.  First target 7400, then 7100.

S&P 500

Inching higher led by the FANG stocks.

 

SHORT TERM TRADER:  Tiny short at 2787; stop above 2880.  Target 2590.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

A generally upbeat tone from Jerome Powell yesterday means that the US dollar gained a little against all major currencies yesterday; cable no exception.   

 

SHORT TERM TRADER:  Small long position at 1.3230; stop below 1.3070.  Target 1.3400, maybe 1.3550.

 

POSITION TAKER:  Long at 1.3235; stop below 1.3000.  Target 1.4000.

EURO/US DOLLAR

Another one stalling at immediate trend line resistance and the MACD is a bit of a mess.

 

SHORT TERM TRADER:  Long at 1.1655; stop below 1.1600.  First target 1.1850.

 

POSITION TAKER:  Square.

GOLD

Picking up the pace, and bearish momentum, as another interim support level gives way.    

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Short at 1242; stop above 1268.  Target 1140.

Nicole Elliott is a long-standing member and Fellow of the Society of Technical Analysts and has taken over the IC’s trading coverage.  She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.