A1 Trading Company

June 29, 2023

What Will Powell Do For USD?

Frank Cabibi

After the Fed's most recent meeting, the USD has been in a bit of a mix. Meanwhile, the ECB and BOJ had released their own statements on monetary policy going forward. We'll take a look at three different pairs and what could happen as we end the week.

EdgeFinder Analysis

Australia is getting trampled by the dollar as the EdgeFinder scans in this pair at -6 strong sell. We got a majority long bias from the crowd while COT does just the opposite. Both countries have similar unemployment levels however starch differences in GDP. The dollar beats the buck in every category except inflation and undmeployment.

One thing we can take away form the Fed meeting yesterday is that investors expect at least one more rate hike by the end of this year. The consensus target is 5.6%. Meanwhile, AUD's recent CPI numbers came out lower than expected, which may prompt the RBA to be less aggressive on interest rates going forward (a pause or cut at next meeting).

Because of the positive GDP news in the US, gold's price sank lower today. The US also saw a decline in the number of unemployment claims this week. Any good economic news is going to squash sentiment for the bulls on this metal.

However, smart money is buying into this move lower. Granted, we don't have this week's data yet, but last Friday showed a bullish flip from COT. If this continues into next week, we could see price find support around the $1,880s and hold here.

EURJPY is pretty cut and dry when it comes to which direction traders are looking to trade in. The pair is very divided in terms of fundamentals. What we can tell for the most part is that the ECB will be more hawkish towards the euro, and as discussed above, the yen will ultimately remain dovish.

EUR also remains bullish on the COT side. JPY is the most shorted asset on the EdgeFinder, and this is nothing new. It's a very obvious sentiment toward the yen which has been consistently losing value over time compared to the other currencies.

Retail Spotlight

Retail is mixed here on the USD. They seem to be bullish on commodities for the most part. Against the dollar, they are less bullish euro.

Smart Money Spotlight

One thing hurting gold's bullish bias is that the divergence in USD and gold sentiment significantly decreased from last week. It appears that both gold and dollar are just about equally long from smart money. We will have to see a decrease in longs for the dollar and an increase in the metal this Friday.

Fundamental Spotlight

US sees the most growth in expansion than EUR and JPY. The Fed and ECB are going to raise rates, according to predictions on either bank. Meanwhile, Japan is likely going to stick to low interest rates. So, as both EUR and USD remain hawkish, the yen looks dovish overall.

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

Hotter CPI Shakes Markets

Yesterday's CPI numbers in the US caused considerable doubt in the expectations of a June rate cut. This morning's PPI came in lower than expected. But, it might not be enough to convince investors of a summer rate cut. EdgeFinder Analysis EURUSD is a -8 now on the EdgeFinder indicating dollar strength after the higher […]

Read More
Key Inflation Data Weighs on Investor Sentiment

Wednesday's inflation report in the US will be very pivotal in how USD-related assets will react for the next month. Higher CPI has investors worried of the Fed who still looks to cut rates at some point this year, but the inflationary trend could determine when these rate cuts come. EdgeFinder Analysis We have been […]

Read More
PMI Pushes Higher into Expansion

This morning's ISM Manufacturing PMI data came in higher than expected this month at 50.3. Here is what investors might be thinking in regards of the latest numbers, and why this could be bearish for the dollar. EdgeFinder Analysis USOil's score drops at the start of this month as the seasonality on the 10-year average […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram