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On May 21, market analysts stated that the minutes of the Federal Reserves April meeting revealed that as the conflict in Iran pushes up inflation, a growing number of officials raised concerns about a tightening stance. At the previous meeting in March, "some" participants indicated that the Fed had ample reason to provide balanced policy guidance, suggesting the next move could be either a rate hike or a rate cut, contrary to the prevailing view that a rate cut would eventually occur. In April, this group expanded to include "many" officials who preferred more neutral wording in the policy statement. The April minutes also noted that, overall, officials generally believed that interest rates would need to remain stagnant for longer than they had initially anticipated.On May 21, Federal Reserve officials concerns about the Iran war pushing up inflation intensified last month, with a growing number of officials saying the Fed should pave the way for a possible interest rate hike. This indicates that incoming Fed Chairman Warsh will be taking over an increasingly hawkish policy-making team. Furthermore, most policymakers at the April meeting indicated that further policy tightening might be necessary if inflation continues to remain above the 2% target. The minutes show that "in response to this possibility, many participants indicated they preferred to remove language suggesting a dovish bias in future interest rate decisions." These minutes, considered "the most divisive in generations," further reveal the shift in the two camps welcoming Warsh: a growing hawkish camp wary of inflation triggered by the Iran war and opposed to any discussion of rate cuts, and a waning dovish camp still inclined towards rate cuts. The main reason driving policymakers further towards a hawkish stance remains inflationary pressures, exacerbated by the war. The minutes show that the April meeting was the second consecutive meeting where more policymakers believed that a rate hike might be necessary if inflation continues to remain above the target.Federal Reserve meeting minutes: The economic outlook forecasts of Federal Reserve staff were slightly stronger than at the March meeting.Federal Reserve meeting minutes: Almost all participants supported keeping the target range for the federal funds rate unchanged at this meeting.Federal Reserve meeting minutes: Participants generally agreed that the Middle East conflict could have a significant impact on the balance of risks and the appropriate policy path.

The chances of a bearish reversal for the USD/CHF rise as bears test the 200-EMA

Daniel Rogers

Jul 19, 2022 11:59

 截屏2022-07-19 上午10.03.58.png

 

The USD/CHF pair has gone sideways after exhibiting volatile volatility on Monday. The asset will likely trade sideways until volatility decreases since it hits resistance at 0.9780. As a result of failing to exceed the crucial resistance level of 0.09000, the asset saw a substantial fall.

 

A major negative reversal was foreseen by the formation of the Double Top chart pattern when the price failed to maintain its position above Tuesday's high at 0.9859. The aforementioned chart pattern frequently indicates waning demand at high levels. A negative reversal is now more likely as a result of the development of a selling tail around high levels.

 

Following the formation of a double top, the asset is forming an initiative selling structure, which points to the entry of those investors who start short positions after a bearish bias has been created. At 0.9767, the major is forming an initiative structure inside the 200-Exponential Moving Average (EMA) border, demonstrating that market participants are respecting the significant EMA.

 

However, the Relative Strength Index (RSI) (14), which signals an oncoming consolidation, has shifted into a range between 40.00 and 60.00. The asset will reach the July 5 top of 0.9705 with a sharp decrease below the July 13 low of 0.9758. If the latter barrier is breached, the asset will be more vulnerable to losses up to the 1. July high of 0.9642.

 

Alternatively, following Wednesday's violation of the 0.9827 high, the dollar bulls may defend the double top pattern. The asset will be propelled by this to its top on Thursday of 0.9886 and then encounter psychological resistance at 1.0000.


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