Fed Chairman Powell said on Wednesday that concerns about trade policy and weak global economic "continue to suppress the outlook for U.S. economic," and the Fed is prepared to "take appropriate action" to maintain economic expansion for up to a decade. These words support expectations of interest rate cuts later this month. After Powell's comments came, the trend in U.S. interest rate futures prices showed that a sharp 50 basis point cut in interest rates this month was more likely. As a result, the dollar index plummeted nearly 40 points in the short term, while spot gold rose sharply, breaking through the $1400.00 and $1410.00 an ounce mark, while the three major U.S. stock indexes rose across the board.
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In a speech for the parliament, Fed Chairman Powell reiterated the Fed's concern about the weakness of the economic and that it will take "appropriate" action to sustain the economic recovery, sending a signal that interest rates are about to be cut. As of release time, spot gold traded at $1419.08 an ounce, down slightly from a high of $1422.29 an ounce on the day.
Powell said that overall economic growth in the second quarter seems to have slowed down, and the outlook has not improved in recent weeks. In his testimony, he said: "The countercurrent appears again." He pointed out that due to trade tensions and the global economic slowdown, investment "apparently" slowed down. In a speech prepared for the congressional committee, Powell compared the Fed ' s "baseline outlook" for the continued growth of the US economy with a series of significant risks, including continued weak inflation, slowing growth in other major economies, and Trump. The decline in corporate investment caused by the government ' s trade war with China and other countries will continue for a long time and the intensity of the uncertainty. Powell said Fed officials hinted at the policy meeting in June that these concerns could lead to a need to cut interest rates. "Since then, based on published data and other developments, concerns about trade tensions and concerns about the strength of the global economy seem to Continue to put pressure on the US economic outlook."
Technically, gold prices broke the upcoming "double bottom" technical form through last night's rally, wiping out the upcoming short mood. Gold prices continued to fall on Tuesday and Wednesday (9 and 10), respectively, suggesting a reversal in gold prices. After a round of gains last night, CCI technical indicators were pulled back from a trend that was about to break-100.0000, which is now at 25.6096, which can be interpreted as saying that gold prices will stabilize nearby after a round of gains last night. The top target is $1431.60 an ounce, with Fibonacci pulling back 50.0% horizontal resistance from February to June 2013.
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In the U.S. market, just as global markets closely watched the parliament testimony of Federal Reserve Chairman Powell, two other news came from the United States. According to sources, the White House plans to submit the U.S.-Mexican agreement to the parliament for a vote after September 1. In addition, U.S. President Trump tweeted again, warning Iran that sanctions against it would be "substantially increased" soon. " The news had a positive impact on higher crude oil prices, boosting the Canadian dollar in the currencies of major crude oil exporters. At the time of publication, the dollar traded at 1.3073 against the Canadian dollar, down nearly 93 points from day-to-day highs.
The White House may first submit the bill to Congress this week to begin the approval process. House Democrats are holding a working group meeting to discuss the issue of existing agreements. But a senior government official and a Republican aide said that the White House and the US Trade Representative Office are strategically divided during the process of getting Congress through the agreement. Deputy Chief of Staff Marwani and Vice President Mike Burns, Shaw, wants to put pressure on the House majority Democrats to set a deadline so they don't miss the time to approve the agreement. US Trade Representative Wright Heze suggested to give the Democrats more time to consider this issue. US President Trump accused Iran of secretly carrying out uranium enrichment activities on Wednesday and warned that the United States will "substantially increase its sanctions" against Iran. At the same time, the UN nuclear watchdog held an emergency meeting on Iran ' s violation of the nuclear deal. "Iran has been secretly conducting 'uranium enrichment' for a long time, completely violating the terrible $150 billion agreement reached by former US Secretary of State Kerry and the Obama administration. Remember, the agreement will expire in a few years. The sanctions will soon Significantly increased!" Trump wrote on Twitter. If sanctions are further aggravated, oil prices will naturally follow the pace of accelerated growth, and the Canadian dollar is also a part of profit. At the same time, today (July 11th), the Bank of Canada announced the latest interest rate decision, keeping interest rates unchanged, maintaining at 1.75%. In a short time, the US dollar against the Canadian dollar was nearly 55 points. But then due to the international situation, the Fed's doves and geopolitical conflicts, the Canadian dollar rose again.
Technically, the Fibonacci withdrawal bitmap line, drawn from the upward trend of the dollar against the Canadian dollar from October 2018 to January 19, observed that the currency pair was blocked at 61.8 percent, failed for the fourth time this month, and is now moving away from this resistance position. By Brin belt shows that unilateral decline has become the main trend in the past month, and the 20-day average has crossed down the 3-day average, the formation of a dead fork, the decline market is inevitable. The target position below looks to 78.6% horizontal position, 1.2978. If the dollar index continues to fall, the dollar will fall below the 1.3000 mark, its lowest level in 18 years and 10 months.
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