Markets on Monday: Powell to Set the Tone
Rowan Crosby • 1 min read
It’s been a relatively volatile period on world markets in recent weeks. On the forex front, much is being driven by the direction of the USD and as yet we haven’t got a clear trend in place.
As speculation around rising US interest rates mounts, much of the attention this week will be on what the new Fed Chair has to say. Federal Reserve Chair Jerome Powell will this week testify to various congressional committees.
Investors have been waiting to hear from Powell as there is significant interest in how (or if) he is going to change things up from his predecessor Janet Yellen. Experts suggest there will be no major changes, but we won’t know until we hear from him.
At the same time, interest rate rises are pushing bond yields around. As speculation mounts that there will be more rate rises ahead than anticipated, bond yields in the US are rising. With the 10-year testing 3%.
Where to for the USD?
The 90.00 mark has been offering up a degree of resistance for the DXY in recent sessions. Looking at the chart the trend has certainly been to the downside.
Between 90 and 91 there are quite a few areas of resistance that are going to slow us down. If we can poke our heads above the upper end of those levels, then things are looking quite bullish.
Long-term I suspect we will see more upside. In the short-term anything could happen.
US Dollar Index (DXY)- 240 min Chart.