Technical Analysis

What’s the signal

There’s a dovish take in the equity and Treasury market today in the aftermath of the Fed. Rates led the way higher and stocks are finishing with yet-another gain despite a volatile day.

Here are BMO rates strategists on the new Fed paradigm:

Our takeaway was relatively
straightforward; the Fed’s new stance allows for inflation to run high and the
unemployment rate to run lower for longer than in prior cycles. Said
differently, the Fed’s dovishness appears to be in perpetuity.
While this
doesn’t strike us as new information per se, the formalization of the framework
triggered reflationary/steepening ambitions to be sure and that’s price action
we’re unwilling to fade.

If rates continue to grind higher, it’s great news for USD/JPY, which also posted an outside bullish day today.

If you look at the broader FX market, it looks more like the old ‘risk on’ trade with the yen laggin and Australian dollar leading the way.

Maybe it’s as simple as that.

For bank trade ideas, check out eFX Plus

Source link

Articles You May Like

BEST SCALPING STRATEGY | Hedging Forex Strategy | 100% Win Rate Strategy | TESTED NOW _ Part 1
$2000 GBPUSD TRADE BREAKDOWN | FTMO GIVEAWAY | Insane Forex Scalping Strategy
Market participants increasingly focused on how asset purchases might evolve
100% No Draw-down Forex Trading Strategy | Market Maker Method
Forex LIVE Trading | Best 1 Min SCALPING Strategy | Trade with Me to make Fast and Big Profits!!

Leave a Reply

Your email address will not be published. Required fields are marked *