Today’s Key Market Drivers: 28th August 2018
“Euro continues to gain strength as US Dollar weakens.”
The US Dollar continued its pull back on Monday following a speech from US Fed Chairman Jerome Powell that gave clues the Fed may raise rates at a slower pace than traders initially thought. The market has been pricing in a rate hike from the Fed in September and Powell cast doubt on this expectation when he said the Fed did not see inflation accelerating beyond 2% any time soon. As a result of the US Dollar weakening the Euro has continued on its winning way and now sits comfortably above its 200 EMA on the 4-hour chart and has overnight busted above an important resistance trend line which I talk about in my daily video. Any pull back on the Euro should be viewed as a buying opportunity with the current trend in play. There is going to come a point in the coming months that traders will begin to ask the question, “How many more rates hikes does the Fed have up its sleeve?” It’s been in a rate hiking cycle now for over 3 years and there will come a point when the Fed will pause and this is another reason why I believe the EUR v USD could be a stand out performer in the coming 6 to 9 months.
As I expected the stock market is leading the way early this week with another record high set by the S&P 500 on Monday and a general mood of “risk-on”. The safe-haven currencies such as the Yen, US Dollar and Swiss Franc have all fallen in value as traders see no reason to add the traditional safe havens to their portfolios. The trade tariffs and tensions surrounding a global trade war have subsided. Mexico and the USA have concluded a trade deal which they are calling The United States Mexico Trade Agreement and tensions with China appear to have simmered for now.
Once again today sees no high impacting economic news for the Asian trading session and the current theme is one of risk-on, stocks up, US Dollar lower and until traders see a reason to shift gears back lower Friday and Monday’s trends will likely continue.
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About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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