Reading yesterday from a prepared text, Jerome Powell, head of the Federal Reserve, noted that: ‘’inflation has been running below the FOMC’s symmetric 2 per cent objective, and crosscurrents, such as trade tensions and concerns about global growth, have been weighing on economic activity and outlook. There is a risk that weak inflation will be ever more persistent than we currently anticipate’’. He believes that business investment had slowed down ‘notably’ but reminded that the Fed would ‘act as appropriate’ to maintain economic expansion.
The Financial Times reports that the British navy blocked an attempt by Iranian war ships to halt the journey of a BP oil tanker through the straits of Hormuz. While President Rouhani insists the UK will face the ‘consequences’ for seizing an Iranian tanker earlier on, yesterday Iran’s Revolutionary Guards rejected a US suggestion that they had tried to block the BP tanker.
DAX 30
The MACD turned down yesterday as we complete a small rounded top.
SHORT TERM TRADER: Short at 12530; stop well above 12665. Target 11800.
POSITION TAKER: New short at 12385; stop above 12665. Target 11600.
FTSE 100
A little dragonfly doji yesterday denotes indecision, while the commodity channel index has been bearish all week.
SHORT TERM TRADER: Short at 7550; stop above 7625. Target 7200.
POSITION TAKER: New short at 7515; stop above 7625. Target 7100.
S&P 500
Pretty much overbought still with IG prices marking a new record high at 3003 yesterday.
SHORT TERM TRADER: Short at 2975; stop well above 3000. Target 2800.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
No longer oversold after yesterday’s inside day, known as a harami 2-candle patter which denotes a pregnant pause. It might mark the bottom of the broadening base we’ve been watching since late May. The move to a marginally weaker US dollar might be linked to Mr Powell’s comments with dealers pricing in another Fed rate cut at the end of this month.
SHORT TERM TRADER: New long at 1.2510; stop well below 1.2440. First target 1.2750.
POSITION TAKER: Square.
EURO/US DOLLAR
Bouncing yet again from the 1.1200 area.
SHORT TERM TRADER: New long at 1.1240; stop below 1.1180. Target 1.1340.
POSITION TAKER: Square.
GOLD
Rallying towards the recent highs despite the MACD which has clearly turned down this week. Perhaps there’s the potential for a triple top at 1439.
SHORT TERM TRADER: Short at 1406; stop above 1440. Target 1340.
POSITION TAKER: Short at 1404; stop above 1440. Target 1320.
