AUDUSD TECHS: Corrective Phase Resolves
Jul-18 19:30
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6603 High Nov 11 ‘24
- RES 1: 0.6595 High Jul 11 and the bull trigger
- PRICE: 0.6524 @ 16:42 BST Jul 18
- SUP 1: 0.6455 Low Jul 17
- SUP 2: 0.6435 23.6% retracement of the Sep 9 - Jul 11 bull leg
- SUP 3: 0.6373 Low Jun 23 and a bear trigger
- SUP 4: 0.6357 Low May 12
The trend set-up in AUDUSD remains bullish, a firming theme given the recovery off the midweek low. Support at the 50-day EMA, at 0.6490, has been breached. A clear break of this EMA would highlight a stronger reversal and signal scope for an extension initially towards 0.6435, a Fibonacci retracement. Key short-term resistance has been defined at 0.6595, clearance of this hurdle would resume the uptrend.
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FED: Question from MNI's Jean Yung
Jun-18 19:23
- MNI's Jean Yung asks Powell about why there are no forecasts for rates to rise or stay steady through next year:
- Powell says "people are writing down their most likely path. They're not saying there's 0 possibility of other things...people write down their rate paths and they do not have a really high conviction that this is exactly what's going to happen over the next two years. No one feels that way. They feel like, what am I going to write down? What would you write down? It's not easy to do that with confidence."
- "We don't rule things in or out. Certainly a hike is not the base case at all."
FED: Higher Gasoline Prices on Geopolitics Tend Not to Have Lasting CPI Affect
Jun-18 19:19
- Powell says regarding potential for poorer data collection from Federal agencies: "we are starting to see layoffs and important gatherers of data are saying that they're having to cut back on the size of their surveys. That's going to lead to more volatility in the surveys."
- Powell asked about higher gasoline prices due to the Israel-Iran conflict - Powell says it's "possible" we'll get higher energy prices, but those don't tend to have lasting effects on inflation.
FED: Powell Says Current Stance of Monetary Policy is in Good Place
Jun-18 19:11
- Powell shrugs off a question about why the Fed isn't cutting rates given recent data - the Chair notes that the labor market "isn't crying out for a rate cut" and that after an initial tariff shock, business sentiment suggests "it feels much more positive and constructive than it did three months ago". "Our current stance of monetary policy is in a good place"
- Asked about the FOMC's expectations for fiscal policy, Powell basically says the Fed doesn't think the legislation going through Congress will make much of a difference:
- "We take fiscal policy as fully exogenous" and they "didn't really talk" about the reconciliation bill going through Congress. Says the "effects will be at the margin" given "we have a very large economy", but that they may have more info by the next meeting (end-July) and "we'll make an estimate, but it's not a major thing."
