As expected, investors finally realized the fact that Jerome Powell did not say anything about a possible reduction in the refinancing rate, and in fact, he rather warned market participants that they should not wait until the monetary policy softened. Such a layout itself has long been taken into account by the market, so that the quotes returned to the values at which they were before the speech of the head of the Federal Reserve.
The biggest disappointment for anyone eager for a Federal Reserve refinancing rate cut was data on orders for durable goods, which showed an increase of 2.1%, instead of the expected 1.1%. After all, it turns out that against the background of a rather impressive increase in orders for durable goods, talk of an impending recession, and it is the media that is actively promoting this topic, it looks somewhat silly. Like it or not, orders for durable goods show the future dynamics of industrial production and retail sales, and if they do not just grow, but accelerate, since in the previous month their number increased by 1.8%, then there is no evidence of a slowdown in economic growth is not necessary. Well, if there is no slowdown in economic growth, then where does the recession come from?
Dynamics of orders for durable goods in the United States:
Today, the market may enter a short stagnation, which will last a couple of days. In fact, no serious macroeconomic data are published either today or tomorrow, so investors simply have nothing to focus on. Of course, S&P/CaseSHiller data on housing prices in the United States will be published today, but their growth rates should remain unchanged, so that they will not have any effect. And to some extent, this is even good, as market participants can take a breath and mentally prepare for Thursday, when the second estimate of the United States GDP for the second quarter will be published.
S&P/CaseShiller Housing Price Index Dynamics:
Following an impressive jump, the EUR/USD pair went into a completely normal recovery, which we predicted in the previous review. The return of the quotation to the limit of 1.1100 is caused by a sharp overheating of long positions, where sellers managed to take the optimal position, aiming for the framework of the recent flat formation of 1.1066/1.1100. Considering everything that happens in general terms, we see that the main downward move remains on the market, where the quote has already managed to work out more than 65% of the recent correction. The pivot point is invariably located in the region of the psychological level of 1.1000 (+/- 30 points), the periodic support, regarding current fluctuations, is located in the region of 1.1070, (daily chart).
It is likely to assume that versatile oscillations, the boundary line of 1.1100 (+/- 10 pips), will persist for some time, where in case of continuation of the original direction, we gradually descend to the 1,1066 boundary.
Concretizing all of the above into trading signals:
• We consider long positions in case the price consolidates higher than 1.1130, with the prospect of a move to 1.1150-1.1160.
• We consider short positions in case the price consolidates lower than 1.1090, with the prospect of a move to 1.1070-1.1066.
From the point of view of a comprehensive indicator analysis, we see that indicators, relative to all the main time periods, signal a further decline. At the same time, there is a slight averaging, where some indicators signal a neutral interest, which jreflects the current stagnation.
