Stronger Data But Fed Remains Dovish

Stronger Data But Fed Remains Dovish

Market focus

Markets continue to receive conflicting signals, but a wary mood prevails. Charles Evans from the Fed pointed to the possibility of reducing the rate immediately by 50 points in July, citing the risks of a global slowdown. External causes seem to be used by central bankers as a rationale for the soft policy position, despite the relatively good internal data of the countries. Time after time, indicators from the US, China, and the U.K. surpassed expectations, but this did not change the markets’ mood: investors are still preparing for the worst.

Stocks

Key indices continue to follow the tactic “the worse the better.” The strong US retail sales data put pressure on quotes, rather than encouraging growth. Despite the fact that Evans’ speech softened investor expectations, market participants seemed to prefer to take profits from the previous rally.

SPX retreat from all-time high

SPX retreat from all-time high

EUR/USD

The single currency came under pressure following the sale on the pound. EURUSD returned to July lows around 1.1200. In addition, the dollar received support after strong retail sales figures. In contrast, business sentiment in Germany continued to deteriorate due to fears around global risks. Bears’ attention could switch now to the area of 1.11, from which the pair rebounded in June 2018 and April-May 2019.

EURUSD fell back to 1.12

EURUSD fell back to 1.12

Brent

Oil fell sharply by the end of Tuesday, losing 4.8% intraday to $63.5 per barrel. The sale was provoked by rumors of a decrease in the degree of tension between Iran and the United States. In addition, data from an independent company, API, noted a not so sharp decline in inventories as expected, returning to the market’s concerns about an overabundance of commodities. From the technical analysis side, the bearish signal is the fact that Brent has undergone a sale from the 200-day moving average, and this often acts as a significant level.

Brent fell sharply from the important support

Brent fell sharply from the important support

The FxPro Analyst Team

Stronger Data But Fed Remains Dovish

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.