Two days ago, I wonder whether the Fed will pause its hawkish policy after the recent market tantrum.
Investors are worried about the US rates, particularly, the “inversion” of the US yield curve. This means that short-term interest rates are higher than long-term ones. When the yield curve inverts, historically, it signals that a recession is near.
Yesterday, the newly-released Fed minutes showed that the Fed may slowdown its hawkish monetary policy in 2019. This led to a sharp decline in the US Dollar.
Against the EURUSD, a nice breakout emerged at the bottom of its long-term range, at 1.150. This move probably ends Euro’s weakness and set the rate up for a rebound back into the range high at 1.180. Note the ‘failed’ downside breakout at 1.130. Watch to buy on retracements near the range resistance at 1.150.
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Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.