Making Sense

USDJPY / EURUSD / AUDUSD broadly performed in line with expectations as highlighted in the view earlier  with strong gains in JPY and w e hit our  SL on the GBPUSD  trade.  USDINR is seeing a rounded top technical formation and we may be breaking out lower. Today's close will be important and then the next immediate support is seen as 82.66.  Fed Chair Powell's testimony offered nothing new - Fed believes that they are peak of the tightening cycle.  T he statement reflected a cautious approach to monetary policy, with a recognition of the uncertainty surrounding the economic outlook and a focus on achieving the central bank's inflation target while supporting economic growth and employment and the delicate balance that policymakers must strike. The statement acknowledged that if the economy continues to develop as expected, there may be a need to start easing the current policy stance at some point during the year. The Central Bank would follow a data driv...

 

GBPUSD has a multiple H&S Formation with neckline support at 1.2528. Keep a close eye on break of neckline support. Complex H&S patterns are rare but potent. 

Interest Rate Pricing off Fed Fund Futures pared back 36 bps of cuts this week as Comments from Federal Reserve’s Christopher Waller reinforced what markets were thinking – sharp deviation in Futures pricing from Fed Projections without a corresponding deterioration in Economic Data. UST bears were emboldened and the data release supported the Soft-Landing Narrative. S&P 500 closed at all time highs.   USD did not participate in Tsy rally at close of last week. USTs caught up to the USD bearishness. USD index closed the week higher by 0.80%. Atlanta Fed GDPNOW Final Est for Q4 GDP are at 2.4%, Control Group Retail Sales rose 0.80% (est 0.20%, prior revised higher to 0.50%), Initial Jobless Claims fell to Sep 22 lows and Continuing Jobless Claims fell to levels seen in Oct 2023. So far we have not seen the trends in employment numbers as were seen in   the sharp dip in Employment component of the ISM Non-Mfg. This week’s release of the S&P PMI numbers would be close...