STIR: Maintaining Little Impact From Powell Remarks

• On the commodity front, Gold remains in a clear bull cycle and continues to trade at its recent highs. The yellow metal traded to a fresh all-time high once again, last week. The break higher confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is $3674.8, a 2.382 projection of the Dec 30 ’24 - Apr 3 - 7 price swing. Initial firm support lies at $3504.1, the 20-day EMA. Initial firm support lies at $3504.1, the 20-day EMA.
• In the oil space, the trend condition in WTI futures is unchanged - a bear cycle remains intact and short-term gains are considered corrective. The pullback from the Sep 2 high highlights a possible recent reversal and the end of a corrective phase between Aug 13 - Sep 2. Initial resistance to watch is $66.03, the Sep 2 high. A stronger resumption of weakness would open $57.71, the May 30 low.

• The dollar index has been edging lower heading into the NY crossover on Monday, as markets await a stacked data and central bank calendar this week, headlined by the Fed. Amid the moves, GBP is a clear outperformer, with cable rising above 1.3600 to a fresh two-month high.
• Bullish conditions for GBPUSD have been bolstered this morning, following the break of the bull trigger located at 1.3595, the August 14 high. The rally that started Sep 3 has retraced the steep Sep 2 sell-off and highlights a stronger bullish development. This suggests the corrective cycle between Aug 14 - Sep 3 is over.
• Immediate resistance is found at 1.3636, the 76.4% retracement of the Jul 1 - Aug 1 downleg, before 1.3681, the Jul 4 high.UK Labour market figures, CPI data and the BOE decision will place a huge amount of attention on sterling this week.
• Softer dollar dynamics have also allowed AUDUSD to rise back towards cycle highs. Last week’s gains plus the breach of 0.6625, the Jul 24 high and bull trigger, confirmed a resumption of the technical uptrend, and the pair has narrowed the gap substantially to the US election related highs at 0.6688.
• In similar vein, EURUSD has edged higher above 1.1750 in recent trade. While underlying bullish conditions remain intact for EURUSD, this week’s Fed decision could be a pivotal moment for the pair, with the 1.1829 bull trigger and the 50-day EMA (intersecting at 1.1639) remaining the key short-term parameters.
• US Empire State manufacturing data headlines a relatively quiet economic calendar on Monday. No surprises are expected from ECB President Lagarde, due to speak at Montaigne Institute’s 25th anniversary event, in Paris.

The Senate is on track to confirm Stephen Miran to the Federal Reserve Board this evening, seating the CEA Chair in time for the Fed’s two-day rate-setting meeting that kicks off on Tuesday. 

• The Senate will hold a cloture vote on Miran’s nomination at around 17:30 ET 22:30 BST, with a full confirmation vote likely to take place at roughly 20:00 ET 01:00 BST. Despite some reservations from institutionalist Senate Republicans, there is not expected to be any GOP opposition.
• Meanwhile, on Sunday, the Trump administration filed an appeal for a stay on a lower court block on Governor Lisa Cook’s firing, a long-shot bid to remove Cook ahead of the FOMC meeting.
• While unlikely, the Trump administration is targeting an emergency ruling from the Supreme Court on the so-called ‘shadow docket’. For this to play out, the three-judge appeals panel would need to deny the DOJ’s request, allowing Trump to immediately call on the Supreme Court to intervene. 
• The New York Times writes in an analysis of the ‘shadow docket’, “In their public appearances, the justices try to counter the perception that they favor the agenda of the party of the president who appointed... The emergency docket presents a different portrait of the court, one in which partisan affiliations map onto voting patterns quite closely…”

Figure 1: Emergency Docket Rulings by Justice

Source: New York Times