Fund flow after Fed clearly hikes rate 4 times

Fed signaled clearly to rise interest rate 4 times in 2018 so Do Jones fell lower 119 points on Wednesday. U.S dollar should get the positive support from this factor but greenback did not rise up. In my opinion, this reaction may reflect the worries about the risk of regression of U.S. economy in the future from the narrow difference of 2-year (2.55%) and 10-year (2.95%) bond yield which is smallest in 8 years. Normally, U.S. economy is risky to regress when bond yield in flat.
The rising interest rate of Fed may lead the foreign investment fund return back to the United State. Furthermore, the worries of trade tension between the United State and China may pressure major stock markets in Asia.
Meanwhile, euro rose above 1.180 on Thursday morning before the ECB meeting. In my opinion, euro may get more internal support from the higher inflation even trade balance may reduce by the U.S. tariff trade. If euro can break the resistant line at 1.1830 dollar, it may rise up to 1.1975 dollar. In addition, U.S. dollar fell lower against yen on Thursday and yen may hold steady before the result of Bank of Japan today. I think USD/JPY may fall to 109.5 points and it may await Bank of Japan decision to support the short term direction.
Gold price rose up to 1,300 USD but the local trend is sideways between 1294 – 1302 dollar so investors may need to see the signal that gold will break resistant line or not. While Bitcoin price try to rise after falling to 6,100 dollar but the increasing volume may pull it to the 2018 lowest point 6,000 dollar. I think the recent safer bitcoin price level is above 7,000 dollar because if bitcoin fall lower than 6,000 dollar, it bearish trend will be stronger and then it may fall harder.
Economic indices in focus:
• Japan: BoJ Interest rate decision and press conference
• EU: Core CPI and CPI (May) and trade balance (April) at 16.00 p.m.

By Niramon Nitnitiphruet (Financial analyst, Olymp Trade).

Olymp Trade Review