US Market Wrap

Fresh off regaining their 2020 highs, markets decided it might be the perfect time to take a breather.

With the FOMC due out on Wednesday, we inevitably saw a bit of a pullback as risk-off flows dominated.

The SPX was lower, while the Greenback continues to fall away sharply. At the same time, GOLD is still holding onto the $1700 level, while WTI as yet hasn’t been able to reclaim $40.

The Data Agenda

All the attention today is really just on the FOMC, however, we have to wonder what new information we could possibly find out?

Of course, we will get a new policy statement and updated dot plot as well as the summary of economic projections – but in truth, there could be nothing new for us to latch onto. The main issue to look out for is really what is going on with bond yields and what could happen?

In response to COVID, the Fed took a range of emergency measure including slashing the Fed Funds rate, but we haven’t seen enough to really expect a big change. While sentiment is good and the US jobs situation has improved remarkably, there are clearly still worries in the air.

We will also be getting a look at CPI for May which has understandably shrunk to just -0.1%.

In Europe, the calendar is about as thin as we have seen for some time and there is not much for EUR/USD and GBP/USD traders to hang their hats on. So again we will look to the sentiment trade to gauge direction today.

Forex Signal Update

The FX Leaders Team hit 1 winner from 3 trades yesterday, with a great trade in the NZD/USD.

EUR/GBP – Active Signal

The EUR/GBP is consolidating around the 0.8900 level and there is strong resistance above at 0.9000. We are short here looking for a bit of a fall in price.

Gold – Active Signal

GOLD has pulled back above $1700 but we are short as the overall sentiment remains positive at the moment. We can clearly see the current range in Gold at the moment.

Cryptocurrency Update

BTC continues to flounder under the $10,000 level and at the moment we sit and wait.

Volatility is now at a 3-month low and that is probably the story at the moment. Just remember, volatility contraction is a precursor to some big moves so keep that in mind as we watch the key levels closely for any signs of a breakout.