Yesterdays Powell's speech at the JHS carries ONLY one message -> there is NO PIVOT anytime soon. The US02Y seems to agree and promptly move up. It is now hugging around 3.40% which was the Fed Projection for Current Year 2022 as per the 06/2022 Dot Plot. What we can see is that Market is still thinking and awaiting direction as to what it thinks the 09/2022 would look like.
Prior to JHS, market was pricing in 75bps for 09/2022 and 50bps each for 11/2022 and 12/2022. This means market expecting rate hike at a SLOWER pace. Perhaps this would now require reassessment. What is the most important is HOW MUCH the Fed would project for Current Year 2022 in the 09/2022 Dot Plot? In the 06/2022 Dot Plot, Current Year was raised to 3.40% from 1.90%. This is an increase of 1.50%. Anything less than an 1.50% next month would be deemed as a SLOWDOWN in pace. My guess is that they would maintain the SAME PACE and raised current year expectation by 1.50% to 4.90%. And this would potentially gives us another 75bps in 11/2022 and 12/2022. Rates would end near 5.00% this year end!!!!!!
How would this affect EURUSD?
Well, this is easy enough. We would just look at the US02Y closely and wait for the 09/2022 Dot plot. If there would be a MAD DASH for DOLLAR, we would expect EURUSD to rise briefly. Remember, supplies can ONLY be found ABOVE. We should be well aware of the usual playbook. If not, just refer to the price action when the 06/2022 Dot Plot was announced. Price actually MOVED UP 150pips ++ in search of supplies. By now, you should know where to ENTER.
If indeed the Fed is to raise the Current Year by 1.50%, we can really make A LOT OF MONEY. Perhaps I need to sell ALL my bicycles to raise some cash so that I can trade more and make more profit :)
Till next time, have a great weekend.
P/S : As usual, do not just belief what I say. Use your common sense.
Prior to JHS, market was pricing in 75bps for 09/2022 and 50bps each for 11/2022 and 12/2022. This means market expecting rate hike at a SLOWER pace. Perhaps this would now require reassessment. What is the most important is HOW MUCH the Fed would project for Current Year 2022 in the 09/2022 Dot Plot? In the 06/2022 Dot Plot, Current Year was raised to 3.40% from 1.90%. This is an increase of 1.50%. Anything less than an 1.50% next month would be deemed as a SLOWDOWN in pace. My guess is that they would maintain the SAME PACE and raised current year expectation by 1.50% to 4.90%. And this would potentially gives us another 75bps in 11/2022 and 12/2022. Rates would end near 5.00% this year end!!!!!!
How would this affect EURUSD?
Well, this is easy enough. We would just look at the US02Y closely and wait for the 09/2022 Dot plot. If there would be a MAD DASH for DOLLAR, we would expect EURUSD to rise briefly. Remember, supplies can ONLY be found ABOVE. We should be well aware of the usual playbook. If not, just refer to the price action when the 06/2022 Dot Plot was announced. Price actually MOVED UP 150pips ++ in search of supplies. By now, you should know where to ENTER.
If indeed the Fed is to raise the Current Year by 1.50%, we can really make A LOT OF MONEY. Perhaps I need to sell ALL my bicycles to raise some cash so that I can trade more and make more profit :)
Till next time, have a great weekend.
P/S : As usual, do not just belief what I say. Use your common sense.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.