Forex Signals Brief for Dec 11: Markets Wait on Powell

US Market Wrap

Data remained on the thin side in the US yesterday, as traders and investors wait on a big couple of days of central bank meetings and the UK election.

There was a bit of talk doing the rounds yesterday, about the state of tariff hikes in the ongoing US-China trade wars. While the speculation was that tariffs would be temporarily suspended, White House officials, failed to confirm that report.

As such, the SPX was a little soft as the market continues to wait for today’s FOMC meeting. A new round of tariffs set to kick in on December 15, so that will be the next key item on the agenda, post-FOMC.

Today’s Agenda

There’s no doubt that today is all about the FOMC, however, I would be very surprised if we hear anything out of the ordinary.

For the most part, market participants are expecting the Fed to keep rates steady at 1.50-1.75%. That will officially bring an end to the 75 bp of interest rate cuts in 2019. The FOMC will likely remain patient and wait to see what the data looks like in the coming months.

As we saw last week, the employment situation in the US is very strong at the moment, which is quite often a leading indicator of what lies ahead. So it could well be a matter of waiting until those news jobs begin to stoke both GDP and inflation.

We also get a look at US Core CPI which is in-fact, pushing up into that 2-3% band already, while the weekly WTI inventory levels will be the thing to watch for oil traders.

Forex Signal Update

The FX Leaders Team finished with 2 wins from 2 signals in what’s been a strong start to the trading week.

NZD/USD – Active Signal

The NZD/USD has been very soft in Asian trade on very little new data. We’ll be keeping a close eye on this one today.

USD/JPY – Pending Signal

The USD/JPY has been holding up around the 108.50 region and looks like it has put in a double bottom of sorts. We are hunting a long signal as a result.

Cryptocurrency Update

BTC continues to grind back towards the $7,000 level as the sellers remain in control.

There’s no real fundamentals at play at the moment, despite some negative headlines in the press. News of another Bitcoin-related Ponzi scheme will do nothing to help investor sentiment for the entire sector.

With the technicals already quite bearish, we will continue to look for opportunities to the short side.