In the wake of Janet Yellen’s testimony, we’ve seen the US Dollar sell off this morning.
Yellen basically said that interest rates don’t need to move much higher and that the Fed is almost at a neutral point…
The dovish tone seems a bit of a back flip from the last time we decided to listen to what Yellen had to say, raising doubts around the US economy being able to return to the Fed’s 2% inflation target.
The promise of more ‘cheap money’ as interest rate normalisation will likely be delayed further, did however give equities yet another boost (like they needed it). I’ll leave it to you to take a look at the SP500 chart that obviously wants to make yet another high.
You can’t buy the dip if there isn’t a dip to buy!
I also couldn’t help myself from sharing this video too:
— Dane Williams (@danewilliamsau) July 12, 2017
The cryptosphere’s new social media darling indeed. I wonder how much money he will make when they find him and ‘donate’ to his cause.
Anyway, the other overnight forex market highlight was the Bank of Canada decision to hike rates. The BoC hiked rates by 0.25% to 0.75% as expected, but were openly optimistic about the path forward which threw a spanner in the works of market expectations.
Even thought this was largely expected, USD/CAD still took a hit:
But as the technical analysis purist in us once again can see, the drop was caught by a pretty obvious support zone that I’ve marked on the daily chart above.
Sticking with the Janet Yellen inspired USD theme, yesterday’s blog highlighted a potential double top in USD/JPY and we spoke about the opportunities that this level might give for intraday shorters:
…and you can see that price is putting in the familiar stepping down pattern that we like to see intraday.
Well take a look at what we actually got:
Step, after step, after step of intraday levels to short off! All in the direction of the higher time frame resistance level after it held.
If you took something off that, it’s definitely going to be a good end to the week. To the rest…
Best of probabilities to you.
Dane Williams – @VantageFX
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Source: Vantage FX Blog