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EURUSD on offer ... switching sides as Fed cut fully priced

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A terrible day for global risk sentiment with all major Equities finishing in the red. Highlights came from Fed Fund futures taking 6bp out of the Fed pricing until December, meaning markets have now fully priced a rate cut by year end. Dollar looks set to take control of the FX board once more as USD bulls enter back into the picture.

I am becoming increasingly concerned that the two sides are too far from each other to find common ground. Trust has been damaged on both sides as the Tweeter in Chief continues to lash out at China in the tit-for-tat escalation. The next key thing to track is whether financial stresses create the necessary pressure to get Xi and Trump on the phone to get talks on track…

After spending the last two weeks positioning around 1.115 for the move towards 1.13 and failing to clear the 1.126 yesterday here I am switching sides and tracking for a "final" flush in EURUSD towards 1.10 before we can start building a healthier floor. This move will make it a lot easier to trade the longer-term rebound in EUR coming later the year.

Good luck and remember to stay nimble.

註釋

As expected bears took charge with a Fed Dec cut completely pricing into the market allowing the USD bid to resume. Will look to take some chips off the table as we approach the bid as usual and leave the rest running for the final targets.