Jerome Powell is in the spotlight… again

During the first trading day of the week, markets traded within a tight range amid a lack of fundamentals, while all eyes are now headed towards the Federal Reserve’s Chair Jerome Powell, who is due to participate in a moderated discussion at the Economic Club of Washington DC.

This would be the first appearance for the Fed Chair after the FOMC decision and after the US Jobs Report on Friday. Markets will be waiting for any inputs about the recent data and what it means for the Federal Reserve’s policy.

SPX began the week slightly lower but managed to close above 4100 and over the 50% Fibonacci of last week’s move, which should be watched very closely. We maintain our bullish outlook unchanged towards 4250 or Feb 16th, whichever comes first.

Reserve Bank of Australia hikes interest rate

The Reserve Bank of Australia decided to raise the official cash rate by 25bps as expected to 3.35%, which is the highest level in about 10 years. The bank kept a hawkish tone, hinting at further increases in the coming meetings. At the same time, the bank noted that the path to achieving a soft landing remains a narrow one.

The Aussie jumped to 0.6940 right after the decision. However, we expect this move to remain limited. This upside momentum may continue just to retest the broken trendline on the daily chart before the downside trend resumes. Therefore, we maintain the short trade that we issued from 0.6935 unchanged with a stop at 0.71, while targeting 0.6725 as a first target in the coming two weeks.

NZDUSD trade update

There is no change to our NZDUSD short trade that we issued yesterday, the short from 0.6320 is still active with a stop loss at 0.6490 and we will revisit this within two weeks. On the downside view, we maintain our initial target at 0.61.

GBPUSD trade profit +180 pips

During yesterday’s trading, GBPUSD declined to as low as 1.2006 shies of our initial target of 1.20 from our entry at 1.2210 on Friday, which means that our short position was up by over 180 pips. In the meantime, we maintain our bearish outlook unchanged, targeting 1.20 followed by 1.19 in the coming days.




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