December 2019 FOMC Press Conference: _D4A8199 - FOMC Chairman Powell answers a reporter's question at the December 11, 2019 press conference.
FOMC meetings, calendars, statements, and minutes are available here: www.federalreserve.gov/monetarypolicy/fomccalendars.htm
- Federalreserve via Flickr
For the fourth week in a row, the EUR/USD pair increased, moving easily around 1.0860 before the close. The pair is up about 250 pip from the year low of 1.0600 recorded in mid-April, so the progress has been minimal.
Since there hasn't been much economic growth in the region—partially because of tight monetary conditions—the Euro lacks self-strength. The pair's recovery is a reliable sign of the general weakness of the US dollar (USD).
Once again, US inflation disappoints
The US inflation data released the day before caused the EUR/USD to peak at 1.0894 early on Thursday. The US Consumer Price Index (CPI) numbers for April largely fulfilled forecasts, but not to the extent that Federal Reserve (Fed) officials could be pressured to change monetary policy.
The US Bureau of Labor Statistics (BLS) reports that the country's CPI rate decreased from 3.5% in March to 3.4% on an annual basis in April.
The monthly CPI increased by 0.3%, which was marginally less than the previous 0.4% increase, while the core annual inflation reading—which does not account for volatile food and energy prices—retreated to 3.6% from 3.8%.
Even more concerning, the US revealed on Tuesday that the Producer Price Index (PPI) increased by 0.5% month over month in April—a significant increase over the previous -0.1%. In the coming months, price pressures at the wholesale level would probably translate into retail, which means the Fed may decide to keep interest rates where they are for an extended period of time.
Apart from that, the US reported Retail Sales for April, which were unchanged and below the 0.4% market participants had predicted.
While the Eurozone released the second estimate of the Q1 GDP growth, confirming it at 0.3% QoQ, the April Harmonized Index of Consumer Prices (HICP) final estimate matched the preliminary estimate of a 2.4% increase YoY.
Germany released its April HICP rate, which was 2.4% YoY, and its May ZEW Survey on Economic Sentiment, which indicated that sentiment and assessments of the current state of affairs had continued to improve. As mentioned, slight indications of economic development within the EU are insufficient to justify a Euro rally.
There will also be several Fed speakers next week, and the Federal Open Market Committee (FOMC) will publish the minutes of its most recent meeting on Wednesday. Federal Reserve officials merit their own chapter.
$SPX is setting up for a move to 5400+. If SPX can hold near 5300 after $NVDA earnings and FOMC minutes we cans see a 80-100 pt move into the end of May. Calls can work above 5300 for this week. I'd stay bullish as long as 5264 holds this month. pic.twitter.com/tWHX1m5oEx
— EliteOptionsTrader (@EliteOptions2) May 20, 2024
Though they have been very busy, policymakers continue to deliver empty messages. Not one of them has been able to offer any new information about the central bank's potential monetary policy actions going forward.
Most officials support Chairman Jerome Powell, leaning hawkishly and voicing worries about how inflation will affect choices down the road. The FOMC meeting minutes might provide some insight, but based on the CME FedWatch Tool, market participants do not expect rate cuts in the upcoming two meetings, and the odds on a September decision are about 50%.
The preliminary estimates of the May European Purchasing Managers Indexes (PMIs) by de Hamburg Commercial Bank (HCOB) are also included in the macroeconomic calendar; US PMIs will be released by S&P Global.
Germany is set to release an updated version of its Q1 GDP by the end of this week, and the US will be opening orders for durable goods for April.
The weekly chart indicates that the EUR/USD pair is in a technically neutral position. The pair is trading in the middle of the directionless 100 and 200 Simple Moving Averages (SMAs) and around a slightly bearish 20 SMA.
📈 $SPX THE GRIND CONTINUES!
— ProblemSniper (@ProblemSniper) May 20, 2024
FOMC minutes this week but no Presser from Powell.
• The grind continues on SPX making new highs this year.
• RSI is at overbought but that does not mean a pull pack. Market can correction through time or price and currently looking at the price… pic.twitter.com/gToWy1bsXU
Around 1.1130, the latter offers dynamic resistance. Simultaneously, technical indicators have continued to rise for a fourth week running, but they are currently hovering around neutral levels and are struggling to break above their midlines, which represents hesitant buying interest.
While the daily chart does not indicate an impending decline, it does indicate a diminished bullish potential. The pair rises significantly above its moving averages, but only the 20 SMA moves north and below the longer, bearish ones, indicating a lack of buying interest.
Technical indicators are still well above their midlines, but they no longer have the upward slopes.
Lastly, the price range of 1.0890 will provide resistance to any renewed buying interest, and if it breaks that level, sellers may move in to the 1.0980–1.1000 region. The 1.1120 region becomes visible if the run exceeds the 1.1000 critical threshold. Conversely, the price zones of 1.0800, 1.0740, and 1.0650 offer support.