Yellen Kisses June and July Goodbye:
Federal Reserve Chair Janet Yellen, speaking at the World Affairs Council of Philadelphia’s luncheon overnight, all but confirmed that the Fed won’t be raising short term interest rates at the June or July meeting.
Quite the swing when barely two weeks ago, she was loudly hailing the economic recovery and rates moving ‘within the coming months’. A time frame that was quickly and easily dropped from last night’s speech if you noticed.
We know that you can’t attach to much weight to any single month’s report (something that Yellen did mention), but the short USD trade was there heading into it with the risks and price skewed the way they were.
If you’ve been following the blog or our @VantageFX Twitter account, you’ll have had this little swing high level on your EUR/USD chart. Once again, the level is back in play and price is reacting to it with yet another daily indecision candle forming at the level.
Moving forward to today’s major event risk on the forex economic calendar and we see the RBA interest rate decision and accompanying rate statement this afternoon in Sydney.
Justin Fabo on Twitter shared the following chart and pricing as we head into the decision and is worth a look or follow:
— Justin Fabo (@justinfabo) June 7, 2016
While the chance of another rate cut is not really there, the statement will be important. Especially around prices following Yellen expressing her reluctance to hike during last night’s speech.
A stronger AUD/USD rate on the back of the Fed delaying more hikes will not help the continuous, stubbornly low inflation readings that we keep getting and how Stevens responds to these risks will be key.
The Aussie has gone vertical out of weekly support. Whether this is just the beginning we’ll see what Stevens has to say.
It is #TuesdayFX so don’t be shy to give @VantageFX a mention when sharing your charts. We’d love to retweet you and help spur the discussion.
On the Calendar Tuesday:
AUD Cash Rate
AUD RBA Rate Statement
Dane Williams – @VantageFX
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