Janet Yellen Health Scare

September 25, 2015

Janet Yellen Health Scare:
Chair of the US Federal Reserve, Janet Yellen is okay after receiving medical attention at a speaking event at the University of Massachusetts, Amherst.

Yellen struggled to finish her speech and after coughing and stopping to re-compose herself several times as her speech came toward the end, she was forced to wrap things up early. After losing her place, she abruptly said ‘I think I will end here’ and received instant medical attention.

Wires have reported that after seeing medics, Janet is now fine and has continued on with her daily commitments. Fed officials have stated that Janet felt dehydrated after a long speech under bright lights and that she felt fine afterwards.

Either way, at 69 and under the obvious stresses that chairing the Fed brings with it, this scare is not a matter to be taken lightly.

Inflation Dynamics and Monetary Policy:
Read Chair Janet Yellen’s speech at the Philip Gamble Memorial Lecture, University of Massachusetts here. I’ve taken a few key quotes out below:

“the US economy will remain strong and inflation pressures low, which would make raising rates possible.”

“Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter.”

While maybe the markets reacted to Yellen’s health more than the content of her speech, she has made it clear that the Fed doesn’t expect to continue with a policy of near-zero interest rates much longer and may raise rates before year’s end.

USDX Daily:
usdx5
Click on chart to see a larger view.

Technically, I’m a little wary of USD longs. What Yellen has said about raising rates before years end is largely priced in. I think there’s still a squeeze down to come before we get the USD rally everyone is looking for.

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On the Calendar Friday:
USD Fed Chair Yellen Speaks

USD Final GDP q/q

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Chart of the Day:
When posting a USDX chart, I always like to try to then post a chart of one of the Forex majors for comparison. Analysis on the USDX chart is such a powerful tool when used in conjunction with any of the majors.

Even if not trading the USDX directly, I definitely recommend keeping one open on an MT4 Demo for reference.

EUR/USD Daily:
eu8
Click on chart to see a larger view.

Price has bounced off our EUR/USD level of interest from earlier in the week. In conjunction with the USDX chart above, I do like the idea of playing for a squeeze before we continue down.

With the bottom of the short term channel creeping closer with each day of sideways trading, the level is available to manage risk around.

Do you see opportunity in EUR/USD?

Dane Williams – @VantageFX

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