AUDUSD TECHS: Monitoring Support
- RES 4: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 3: 0.6660/6707 High Sep 18 / 17 and a bull trigger
- RES 2: 0.6629 High Sep 30 & Oct 01 and key short-term resistance
- RES 1: 0.6551 50-day EMA
- PRICE: 0.6484 @ 16:48 BST Oct 17
- SUP 1: 0.6440 Low Oct 14
- SUP 2: 0.6415 Low Aug 21 / 22 and a bear trigger
- SUP 3: 0.6373 Low Jun 23
- SUP 4: 0.6357 Low May 12
Tuesday’s recovery in AUDUSD continues to highlight a possible reversal pattern - a hammer candle formation. If correct, it signals the end of the bear leg that started Sep 17. Note that moving average studies have remained in a bull-mode position during the latest bear leg, highlighting a dominant M/T uptrend. Initial resistance is 0.6551, the 50-day EMA. A breach of 0.6440, the Oct 14, would cancel the reversal signal and reinstate a bear threat.
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FED: Powell Says Fed Doesn't Take Anchored LT Inflation Expectations For Granted
MNI's Jean Yung concludes the press conference, asking Powell about how he views inflation expectations, and whether fiscal deficits and the debate over Fed independence are boosting those expectations. Powell says:
- "Shorter term inflation expectations have tended to respond to near term inflation. So if inflation goes up, inflation expectations will predict that it takes just a little while to get back down. Fortunately, throughout this, this period, longer term inflation expectations, both breakevens in the markets and almost all of the longer term surveys, Michigan being a bit of an outlier lately, have been just rock solid in terms of running at levels that are consistent with 2% inflation over time. So we don't take that for granted. We actually assume that our actions have a real effect on that, and that we need to continually show and also mention our commitment to 2% inflation. And so you'll hear us doing that."
- "The latter part of your question was about independence. I don't see market participants.... I don't see it as something they're factoring in right now in terms of setting interest rates."
AUSSIE 3-YEAR TECHS: (Z5) Trading Above Its Recent Lows
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.685 - 1.000 proj of the Sep 3 - 12 - 15 price swing
- RES 1: 96.615 - High Sep 12
- PRICE: 96.550 @ 20:10 BST Sep 17
- SUP 1: 96.435/95.900 - Low Sep 3 / Low Jan 14
- SUP 2: 95.760 - Low 14 Nov ‘24
- SUP 3: 95.480 - Low Jan 11 2023 and a major support
Aussie 3-yr futures continue to trade above their recent lows. The short-term resistance to watch is 96.615, the Sep 12 high. Clearance of this level would signal scope for a stronger short-term recovery and pave the way for a climb towards 96.685, a Fibonacci projection. On the downside, first support to watch lies at 96.505, the Sep 15 low. Key short-term support has been defined at 96.435, the Sep 3 low.
FED: Powell Plays Down Miran Third Mandate Comments
- Asked about Gov Miran's comment that the Fed actually has three mandates from Congress, including moderate long-term interest rates (not just the employment and inflation mandates): "We always think of it as the dual mandate, maximum employment and price stability ... we think moderate, long term interest rates are something that will result from low and stable inflation and and maximum employment. So we don't, we haven't thought about that as for a very long time, as a third mandate that requires independent action. So that's where that is. And there's no, there's no thought of, as far as I'm concerned, there's no thought of considering that, you know, considering that we somehow incorporate that in as something in a different way."
