The Week Ahead: Friday 12th July 2019 – Currency Point – USD, fait accompli?

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It raises the bigger question in the USD dovish setup and that will be: it s not’if’ that the FOMC cuts, its’how much’ will they cut?
Due to the slowdown in economics, inflation under unemployment and trend ticking up the AUD was priced properly, over the last year. This led to a pricing at rate reductions,
The NFPs specific throw out of a red herring, its strength observed pairs whipsawing away from trend and did in fact knock out a former trade idea in USD/JPY by hitting on our stop. However, the NFP rally of Friday week has been lived and the most important event — even a Dovish Fed — has grabbed hold of the USD.

The set up in the USD indicates you can almost select your pair of choose. It’s always’best practice’ to opt for the set you comfortable with, so for me personally its AUD/USD.

From Evan Lucas,

Trade Caveat:

From Evan Lucas,
Which have been sent in the shape of two cuts back. When we couple this with all the new government taxation reform laws the level of stimulation in the Australian
economy should be quite positive in the coming period and consequently an AUDUSD optimistic.

Straying Extended AUD/USD

Entrance: 0.6950 Goal: 0.7200, Stop: 0.6900

Chairman Powell’s press conference mid-last week has produced the July FOMC on the 30-31 st that a fait accompli from the marketplace’s eye. If we take a look at market probability pricing pre-NFP a 25-basis point (bps) cut was 82%, Post-NFP below 50% and after that after Powell’s testimony 93 percent.

If we look at the US-China commerce tensions this too seems to have abated (for now) again a threat F optimistic and even more so for an Asian-focused currency like the AUD.

Which Satisfy?
The USD, in the marketplace standpoint anyhow, is confronting in a very dovish setup; and that’s despite last week’s powerful non-farm payrolls (NFP).

Money Point — USD, fait accompli?

A minority stage to the FOMC minutes which suggests a’gradual’ approach to accommodation suggesting 25bps is much more likely (I actually concur with this statement as there is still good strength in the US economy). The majority appeared to favour a move of around 50bps at the July meeting.