(MENAFN- Daily Forex)
- After the Federal Reserve announcement and press conference, somehow the world got the idea that the Federal Reserve has suddenly become dovish.
- I have no idea what it is they have seen, but this is the second time the last 3 meetings that money managers have listened to Powell and completely ignored what he said.
- At this point, it looks like we are going to try to rally but I suspect that sooner or later the adults return to the fold and start shorting again.
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The 0.67 level had been massive support , and we are below it. I think there is a certain amount of market memory in this area, so I will be looking for selling opportunities at the first sign of exhaustion. I have no interest in buying the AUD/USD , I think that Jerome Powell made it quite clear that they are going to be very aggressive with their interest rate hiking policy. We've recently broken through a major double bottom, and now it's lunacy to be shorting the US dollar.Downtrend Likely to Continue
In fact, it would not surprise me at all to see this market head back towards the 0.60 level over the longer term, but obviously we have a couple of major areas to pay attention to between now and then. I do believe that this is a market that will eventually find its way much lower, and now it's not until we break above at least the 50-Day EMA that I would consider the trend even remotely changing. Even if that were the case, it's difficult to imagine a scenario where you should be betting against the greenback in this environment. The market is likely to continue being surprised and disappointed by not only growth, but the outlook, so I really don't know what money managers were thinking.
Nonetheless, we are in a downtrend and that should continue to be the case, and as I write this, we are heading toward the final hour of the trading session, which quite often we will see large money managers come in and swap the market. Whether or not the adults come in and push these lower remains to be seen, but it's obvious to me that this is a market that remains somewhat disconnected from reality. Occasionally we get these happy little bounces, only to see them get squashed yet again.
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