Market Commentary – Hantec Markets 28/08/2020

by birtanpublished on September 11, 2020

Welcome to my daily report market analysis videos with me richard perrymaker analyst at han tech on friday the 28th of august there is a risk positive line running through markets today what we've seen is a

There was a lot of volatility in the wake of that uh big really important speech by fed chair jerome powell yesterday he um laid out the path for the federal reserve to

Accept an average inflation targeting method of of um going towards its uh mandated two percent target on inflation um also aspects of the unemployment mandate as well but

The inflation targeting method measure was the main focus um and uh certainly that means that inflation can run above the two percent target for some time um in order to uh

Allow the average inflation to come back towards the two percent mark and that would suggest that the federal reserve is going to remain lower for longer or looser for longer on monetary policy

So what we have seen is that um aside from volatility yesterday we've seen that the dollar has started to fall back again quite strongly um and interestingly yields of

Yields have been climbing um a yield curve steepener as you can see with the yield spreads widening between the twos and the tens and that is because the the uh the shorter end of

The curve which is the rates end that is held held flat but the treasury yields at the longer end i.e the 10-year here are rising um on inflation expectations so subsequently we see the yield curve

Steep enough but that is a risk positive move but also dollar negative so um that's the inference that we've seen there through markets and we can get that gauge

Through the fact that uh u.s futures are up again um continuing to climb on that uh e-mini's contract there um and a little bit mixed actually on the european side they were up earlier a

Little bit sort of shading uh a little bit mixed at the moment but broadly speaking risk positive and you can see also here gold starting to break higher again

And silver and uh we are starting to certainly see the the dollar under performance across the board you've seen a breakout on cable to uh multi-month highs and also we're seeing that euro is putting

Pushing towards um its resistance levels as well so really strong moves that we've seen there now other news overnight we've seen the um resignation or the the pending resignation

Of um prime minister shinzo abe of japan now that has strengthened the yen uh quite a lot actually in the last um few hours um and sort of focuses on my on my chance

Of the day which is uh sterling in but still i think that there is an interesting angle there on sterling yen to play out but at the moment we are watching out for yen strengthening but broadly speaking

Dollar weakness is the key play there now in terms of data points today we've got um us inflation on the job on the agenda for the fed's preferred inflation gauge the core pce and that's at 130 and

That's expected to improve to 1.2 percent on a bounce back in july from 0.9 so obviously still well under that two percent um area that uh the federal reserve will

Be targeting um and uh into the afternoon we've got the final michigan sentiment um which is expected to uh be unrevised from 72 spot eight so um that does take me to my chart of

The day oh just before we get into that governor bailey of the bank of england speaks at jackson hall today so watch out for that sterling traders now sterling itself is uh part of our

Chart of the day which is the sterling yen cross now what we've seen is a breakout yesterday on sterling yen really important break it's been buzzing underneath this

Resistance at 139.75 for the past couple of weeks broke out on wednesday decisive upside break yesterday continued high today and then you got the news that shinzo abe was resigning

And that strengthened the yen quite significantly dragged sterling yen lower but i think this is going to be a chance to buy once this settles down i see some good support in this 3975

Area to 4020 good breakout support in the last couple of days you've got the uptrend that comes in at 38.75 today you've got the rising 21 day moving average what a

Cracking line of support that's been in the past six to eight weeks that comes in at just above 39 big figures so this is coming back into a nice band of support and if the market starts to develop that

Support once more i think you can see that the um the yen so the sterling yen cross rate is likely to be rising still with these strengthening momentum indicators still so

I think weakness is going to be seen as a chance to buy and as i said nice banner support just underneath initially 3960 on the hourly chart you can see that's a bit of a feature in the last couple of days

But it's coming back into the support now so with that in mind i wish you good luck in your trading today click here to subscribe to our analysis videos go to our website sign up for our webinars and click to

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