Chances are 99% That the Fed Interest Rate Will Stay the Same

The US dollar continues to weaken against the single European currency. The diplomatic scandal over Jared Kushner, Trump’s son-in-law, who testified before Congress yesterday, had no small part in this. Kushner confirmed that there was a meeting with Sergei Gorkov, the head of Vnesheconombank, but denied the accusation of improper ties to Russia, for example, in discussing sanctions against the RF. This improved the outlook for the dollar, but not much and not for long.



Fundamental news today included the Conference Board’s consumer confidence index. Despite the consensus forecast of 116.2, which is worse than the previous 118.9, it is highly likely that data above expectations will not save the US currency and we will continue to watch the bears gorging on the EUR/USD pair. Analysts estimate the probability that Janet Yellen will keep the interest rate unchanged at the July 26, 2017, meeting at 99.9%. The US stock market is bearish, too. The return on US medium- and long-term treasury bonds fell in yesterday’s trading. At 3:00 pm GMT the Dow Jones had fallen almost 100 points.



However, nothing disastrous is happening technically to the EUR/USD pair. On the pair’s long-term monthly charts, the euro is seen testing the upper level of a 23.6% Fibo correction at 1.1690. We will therefore continue to remind bulls of the need to set short stop orders and to watch carefully for market signals.



In Europe, prices on the commercial real estate market are surging. In particular, a study by Fidelity International Ltd. notes that prices for commercial real estate in Europe’s capitals are topping 2007 highs. This process obviously is playing out amid the withdrawal of money from British assets amid BREXIT risks. The pound sterling remains stable for now, while work on the “divorce” continues in Brussels. Amid the Washington meeting of the U K’s Secretary of State for International Trade on the conclusion of a Transatlantic Trade Agreement, Carolyn Fairbairn, director general of CBI, announced that the UK’s relations with European partners take precedence over American colleagues. A “zero sum” between Europe and the United States does not provide certainty for the British economy. Today, those who are interested can track the remarks by Andy Haldane, a member of the BoE’s Monetary Policy Committee, which begins at 5:00 pm GMT. We do not think that this will have a substantial effect on the British pound, which just might set its sights on 1.3100. Technically, according to Elliott’s wave theory, the chart just might be in the fifth and final growth wave of the trend impulse.



Among other news coming out today, market players might note news from New Zealand, where John McDermott, assistant governor of the Reserve Bank, is expected to speak. The kiwi has also recently risen relative to the US dollar on investors’ disillusionment with the FOMC’s tougher actions and the political risks. At the moment, it is entirely likely that a technical correction has appeared that might take the kiwi to 0.7370, among other things possibly aided by the anticipated trade balance that will be published tonight at 10:45 pm GMT.



Nikolay Dudchenko, Olymp Trade

Olymp Trade Review