Another month is coming to the end, and after all the China- and Greece-related fears of late June and early July, the lower-volatility “dog days” of summer (all due apologies to Southern hemisphere readers) have finally come to the fore over the last couple weeks.
It’s been a quiet overnight session for most major currencies as market participants refrained from placing large trades ahead of today’s FOMC meeting. As we noted yesterday, the central bank is unlikely to make any outright changes to monetary policy, but the wording of the accompanying statement could tilt the scales in the hotly-contested “September vs. December” (for the first rate hike) debate.
It’s been a generally quiet Tuesday in global markets, with the U.S. dollar regaining some of yesterday’s lost ground, WTI edging higher after hitting a new 4-month low under 47.00 and gold marking time below $1,100.
Given the consistently strong U.S. data though, a dip toward the near-term bullish trend line and 38.2% Fibonacci retracement around .9425-50 would be a more conservative target in the dollar/Swiss franc currency pair.
With China and Greece-related fears now “resolved,” we may finally be entering the feared summer doldrums in markets, where traders are focused on getting to the beach as quickly as possible rather than pushing markets around.
According to our recent Elliott Wave analysis on the Aussie dollar/Japanese yen currency pair shows there's a decline to 89.14 in completed wave (W), and pair has since bounced in wave (X) from this level.