The U.S. dollar lost against most majors even if it appreciated against safe-haven currencies on Friday. The Syrian conflict concerns faded at the end of the week and boosted the USD versus the JPY and the CHF. The release of the meeting notes from the March Federal Open Market Committee proved to be a positive for the American currency as the Fed was more hawkish than expected. Next up for the markets will be the release of retail sales data in the United States and the Bank of Canada (BoC) rate statements.
Regarding this week’s forecast, I noted that the British pound, the euro and crude looked bullish, and they behaved so. The projected range in crude offered a good reversal trade level into Wed. Also, my list of breakout symbols (Canadian dollar, crude oil, the pound and the S&P 500) produced pricing outside the prior week’s ranges. As a monthly chart follow-up, VIX futures are forming an inverted hammer, while Ten-year T-Notes formed a reversal long signal last month.
Markets haven’t been behaving well with Thursday/Friday being the latest example. I’m not even sure it was the weak jobs number which came in at 103,000 despite expectations of 182,000. Supposedly the Ides of March always augur in bad weather which leads to a "less than" haul. We’ll see soon enough in 30 days whether the weather caused an outlier.
There are a number of key events this week but inflation and the path in which the Fed is tightening remains at the forefront. This has literally taken the stability and liquidity out of the market which in turn has made other situations, i.e. the trade war, have a greater and more immediate impact on market conditions. CPI, a leading inflation indicator, is due Wednesday morning at 7:30 a.m. Central.
The U.S. dollar is mixed against major pairs after the U.S. non-farm payrolls (NFP) headline jobs number failed to meet expectations. The United States added 103,000 jobs short of the 193,000 jobs forecast. Wage growth came in as anticipated at 0.3% to keep the pressure on the U.S. Federal Reserve to raise interest rates.
Instead of pickin’ a guitar or banjo, and I do play five instruments like everyone here in Nashville, I’m tryin’ to pick some market directions early using a 3-day chart, in case you want to follow along. I must predict next week’s markets earlier this week (on April 4) due to being out of town April 5 and 6. Let’s see how I do, modifying time frames with next week’s pivots not yet well formed nor fixed in place until Fri. close--I’m pivotless!
The U.S. dollar gained against major pairs thanks to strong economic indicators and the end of month and quarter flows. The greenback had a positive week ahead of the Easter holiday. The first week of April will kick off with a plethora of U.S. economic data, the most important of all the U.S. non-farm payrolls. Central banks will get back into action with the Reserve Bank of Australia (RBA), although no changes to monetary policy are expected in the next meeting.
For beach party breakouts, soybeans, gold, and the British pound have higher narrow-range pivots inside each other for next week and month constituting a pivot breakout mix on multiple time frames- could a strangle/straddle apply? For a milder breakout story, crude has higher inside pivots for next week, and lower inside weekly pivots for next week are in the S&P 500 and inside lower monthly pivots in Bitcoin.
Federal Reserve Chairman Jerome Powell went to Wall Street and was not happy enough to enact whatever rate hikes the Fed had planned for this year, and markets were told to count on three more in 2019. Nobody knows what tomorrow or next month will bring, let alone next year. I came away thinking this guy is trying to pop the stock market bubble.
The S&P 500 lost 5.7% last week in its worst week since January 2016. The market finished Friday’ssession making new lows; trading to 2586 before settling at 2597.75. The 200-day moving average came in at 2584.25 and kept things in check. The dollar has failed and is setting up for the next leg lower fundamentally and technically. If the dollar weakens, commodities priced in dollars strengthen and there are three on our list that we are watching most closely; gold, crude and silver. All three are set to capitalize on a more tumultuous geopolitical environment but each have many of their own reasons.