The USD is tilting modestly higher after William’s comments

Technical Analysis

The comments from NY Fed President were a bit more hawkish:

Federal Reserve’s Monetary Policy Stance:

  • Stresses the need for a restrictive policy stance for some time.
  • Suggests the Fed can cut rates when confident that inflation is moving back to 2%.
  • Reiterates that the Fed’s work to bring inflation back to 2% is not yet complete.

The USDJPY has moved to a new high extending above the earlier high today at 145.82 – reaching 145.825 – but has backed off a bit. The current price trades at 145.68. The high from last Friday reached 145.974. Yesterday, and today, the price based at the 100 hour MA (blue line).

The price has stepped higher today without much in the way of corrections. Looking at the 5-minute chart, below, there was a corrective/sideways move below the 100 bar MA in the European session, but after moving back above the 100 bar MA (blue line), the price increased with upside momentum. THe lagging 100 bar MA is at 145.506 (and moving higher). The 38.2% of the last leg higher comes in at 145.413. It would take a move below to tilt the short-term bias lower, but that is the minimum.

The EURUSD has been trading above and below the 200-hour MA over the last two hours of trading and made a new high in the current bar, but has rotated back below the 200 hour MA on the more hawkish comments. The 200-hour MA at 1.0967 for sellers, will now be eyed as close risk for sellers. Does the USDs move lower vs the EUR run out of steam? The high price today could not extend above the 38.2% at 1.09768. Sellers in play on the failures.

US stocks are seeing some pull back.

  • Dow Industrial Average is up 165.9 points or 0.44% at 37690.39. I price and the Dow reached 37740.77, up 215.60 points.
  • S&P is up 25.76 points or 0.54% have 4782.25. The all-time high closing level is at 4796. The S&P high price reached 4790.80, up 34.29 points.
  • Nasdaq index is up 105.01 points or 0.71% at 14963.23. The NASDAQ high price reached 14998.20, up 140.49 points.

Looking at the US debt market, yields are trading near their highs- especially out the yield curve

  • 2-year yield 4.366% -0.7 basis points
  • 5-year yield 3.982% +0.5 basis points
  • 10 year yield 4.037% +2.1 basis points
  • 30-year yield 4.213%, +2.9 basis points

US CPI data will be released tomorrow at 8:30 AM. Adam previews the data HERE. Focus will be on the core.

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