This is one busy week and the main event, Friday’s jobs report, is set to close things out at 7:30 am CT. The focus has shifted away from job creation and is now on wages. While Non-farm Payroll takes the cake, this is a potent combination throughout the week. Kicking things off is ISM Manufacturing on Monday at 9:00 a.m. Central.
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.
This was a monster session for the Euro gaining almost a penny. The move started early this morning when French GDP beat expectations and picked up further steam on hawkish comments from German Bundesbank President Weidmann. The yen took a bath today after crossing the .9600 mark on Friday for the first time since November 2016. The dollar was surely not culprit today as the yen was the only currency to truly lose ground against it.
The U.S. currency is weaker against all major pairs as US tariffs targeting China were announced. The U.S. dollar was trading higher on Wednesday after the U.S. Federal Reserve hiked interest rates by 25 basis points as anticipated. Fed Chair Jerome Powell was neutral on his first press conference but the economic projections painted a strong U.S. economy.
The Federal Reserve raised rates a quarter point as expected this afternoon. However, they continued to project only three hikes this year while many speculated a fourth will be added. Citing a stronger economic outlook in the face of dismal February data, they raised their growth forecast for 2018 and 2019. The Fed did increase next year’s rate-hike projections to three from two. But still, the U.S. dollar got hammered. We have been discussing the impact of perception for months now.
The dollar rebounded today against all major currencies as tomorrow’s FOMC Meeting comes into focus. This price action started early on poor reads from UK inflation and German and Eurozone Sentiment data.
The Euro staged a strong rebound today after a poor finish to last week. A string of soft regional and Eurozone CPI reads started the Euro off on weak footing Friday. Further pressure was added on strong U.S. data that included Industrial Production, JOLTs Job Opening and Michigan Consumer Sentiment; the Euro finished the week at the lowest level since March 1.
The U.S. dollar is mixed against major pairs ahead of the March Federal Open Market Committee (FOMC) meeting. The Fed is expected to deliver its fist interest rate lift under Chair Jerome Powell. The Fed will publish its rate statement on Wednesday, March 21 at 2:00 p.m. Eastern. Strong data has fuelled the dollar revival but the drama in the White House and tariff uncertainty are keeping the currency down against safe haven currencies.
“Sell in May, then, go away,” some do say, but, in this instance, I assert one should sell in March-April and buyback in May-June on certain symbols. Because of some rare events on monthly charts, a few short trades may be the most remarkable trades of the summer or year. The euro, pound and soybeans (as of the time of this writing on Thursday, March 15, 2018) reached a drastic spread distance from the center point of and way above certain Bollinger Bands and a moving average