Daily Alert – Friday 30th April 2021: Dovish Fed sets the tone

Mark NugentApril 2021, Daily Alert

Daily Alert – Friday 30th April 2021: Dovish Fed sets the tone

As is so often the case, the market was quiet during the run-up to the Fed on Wednesday. Chair Powell was dovish, as expected, and the markets were unmoved.

I am seeing a lot of red on the economic calendar, especially in the important prints of GDP and CPI.

Across the week, equities, oil and GOLD have barely moved.

Month-end re-balancing is messing up currencies, with the weekly move being defined by today’s large moves in most cases. The USD looks like it will post a bull week, saved by today’s significant rise as the Fed’s favoured measure of inflation, Core PCE, meets expectations after misses on Durable Goods, Capital Goods and GDP earlier in the week, 1and the US10-year yields breaks a 5 week losing run on the weekly chart.

The EUR drops today, producing a bearish candle on the weekly chart, with CPI and German GDP both missing today.

The GBP is slightly down on the week, again provided by a large down move today.

The JPY, AUD and CAD are down on the week and the CAD continues its inexplicable rise.

I traded USDCAD short on Wednesday night. The theme was weak USD. It moved my way on Thursday sufficiently to allow me to move my stop loss to breakeven, which was hit today during a brief upwards spike.

CADJPY was hindsight trade of the week, based on the weekly move versus weekly actual-true-range. As is often the case, I can see no reason to have entered this trade early in the week, which sort of makes me happy.

Have a great weekend and I’ll be back on Wednesday as Monday is a holiday here in the UK.

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