MARKET BRIEFING – LONDON OPEN 18.06.2015
Yet another Fed statement has come and gone and not much has really happened.
The Federal Reserve is very much still a hostage to data. Although Q1 data was very soft the FOMC chairwoman’s assessment is that the US economy is on the right track and that and a normalization of the interest rate environment is on the cards in 2015.
We do have three more data cycles leading up to the September meeting. Therefore there is still time to see some good data which will give the Federal Reserve the green signal to hike rates from their current historic lows of 0.25%.
It would therefore seem that all options are on the table with Janet Yellen adopting a wait and see approach to the incoming data.
Are we ready for an interest rate rise in September? I don’t think the markets have adjusted to the new reality. A preference for Q1 2016 still seems to the most popular timing for the inevitable to happen.
However if during the coming months the data does support a future interest rate hike I do not expect the FOMC to make bold moves in raising the cost of capital. I do however expect the FOMC to test the water, increase interest rates and monitor the effects before deciding on subsequent rate increases.
With respect to division within the Federal Reserve there does not seem to be any obvious splits between members who have a dovish or hawkish view on future interest rate policy with all members accepting that this long period of historic low interest rates is coming to a close.
EURUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.1490
Target 2: 1.1180
Projected range: 0.0155 ATR
Daily control level: 1.1200
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5991
Target 2: 1.5709
Projected range: 0.141 ATR
Daily control level: 1.5620
USDJPY
The intraday technical outlook
Trend 1 hour: Down
Target 1: 124.69
Target 2: 122.51
Projected range: 1.09 ATR
Daily control level: 124.50
USDCHF
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.9335
Target 2: 0.9099
Projected range: 0.0118 ATR
Daily control level: 0.9330
USDCAD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.2329
Target 2: 1.2123
Projected range: 0.0103 ATR
Daily control level: 1.2350
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7846
Target 2: 0.7648
Projected range: 0.0099 ATR
Daily control level: 0.7780
GOLD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1198.21
Target 2: 1172.49
Projected range: 12.86 ATR
Daily control level: 1175.30
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 61.33
Target 2: 58.19
Projected range: 1.57 ATR
Daily control level: 61.50
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