Metals rise strongly to reach new highs; Fed's Powell has no surprises; USD/JPY retests 34-year high at ¥152; Crude Oil and Gasoline Futures Rise; All eyes on cocoa futures after spectacular gains; Swiss CPI Unchanged.
➡️ A few hours ago, gold spot once again reached a new all-time high above $2,300. Gold tends to be positively correlated with risk assets, many of which have rallied to new highs in recent days. Trend traders will want to stay Long here. Other precious metals also posted gains, with silver rising sharply to a new high of the last 2 years. Even some non-precious metals like copper are reaching new long-term highs.
➡️ In the Forex market , the US dollar index was held at a key resistance level earlier this week, and has been selling off ever since, suggesting the dollar has peaked for the time being and giving a technical boost to all trades against the dollar, many of which especially regarding raw materials, we can observe a good performance. It may be wise to trade against the greenback for the rest of the week, unless surprising data is released. Since Tokyo opened today, the strongest major currency has been the New Zealand dollar, while the weakest major currency has been the Swiss franc. The Swiss franc is weak because Swiss CPI data just released today they were unexpectedly low, with no change on a monthly basis when a rise of 0.3% was expected.
➡️ In public remarks, US Fed Chair Powell said policymakers will wait for clearer signs of reducing inflation before cutting interest rates , which is nothing new and doesn't surprise anyone.
➡️ The Japanese yen continues to be weak, maintaining the USD/JPY currency pair close to its recent record high, just below ¥152. Japanese financial officials will likely threaten intervention if ¥152 is tested again, but it seems likely that the price will not fall much in the meantime, offering traders potential opportunities to trade in that range. Trend traders will still be interested in being long the USD/JPY and shorting the Japanese yen in general. Analysts speculate that Bank of Japan intervention, if it occurs, will likely temporarily push the price down to around ¥147/¥147.50.
➡️ Crude oil looks bullish , with WTI and Brent reaching new 5-month high prices yesterday. Gasoline futures hit a new 18-month high yesterday.
➡️ The minor raw material Cocoa continues to appear very bullish in the long term, albeit short term price action suggests a deeper bearish retracement. The value of the superfood has nearly tripled in the last year alone, and many analysts suggest that supply-side shortages are at least partly responsible for the meteoric rise. Every year there is more and more demand for cocoa as it is coveted as a key ingredient for chocolate but also as a superfood in its own right. Trend traders they will be interested in the long side, even if with a such high volatility and net earnings, it could collapse at any time, so trend traders must be careful about using one disciplined stop loss if they go long. In addition to cocoa futures, there are cocoa ETNs available that may be more suitable for trader and retail investors.
➡️ Yesterday's releases by:
- The ADP forecast for nonfarm payroll claims turned out to be stronger than expected, suggesting economy American more lively.
- The US ISM Services PMI – came in weaker than expected, suggesting the US services sector is facing declining demand.
➡️ Data on unemployment claims in the United States will be released today.
Credit by DailyForex.com
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