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Wall Street extends gains on Fed outlook
With most barriers to a Fed rate cut seemingly removed, US indices pushed higher yesterday, approaching record highs again. Crude oil prices soared following the downing of a US surveillance drone in the Gulf.
US30USD Daily Chart
The US30 index rose for a fourth day yesterday, as investors took on more risk in their portfolios following the dovish FOMC meeting yesterday
The index climbed above the April high and now probably has eyes on the record high of 26,940 struck back in October last year
The flash Markit manufacturing PMI is seen drifting lower to 50.4 in June from 50.5 last month, the latest surveys show. Note the June Philadelphia Fed manufacturing index released yesterday was a disappointment, falling to 0.3 from 16.6 with expectations of an 11.0 print.
DE30EUR Daily Chart
The Germany30 reverted back to positive mode yesterday after Wednesday’s setback, touching a three-week high
The May high of 12,452 is within reach while the 78.6% Fibonacci retracement of the May-December drop last year is at 12,581
Germany’s flash Markit manufacturing PMI is expected to improve slightly to 44.5 in June from 44.3 in May. This would be the 11th month in a row it has been in contraction territory.
WTICOUSD Daily Chart
Crude oil prices surged more than 5% yesterday following reports that a US surveillance drone had been shot down in the Gulf
WTI is moving toward the 100-day moving average at 58.52, which has capped prices since May 31
Trump tweeted that Iran had made a “big mistake” by downing the drone. There has been no news about possible responses, though in a later tweet he commented that the incident was probably a mistake by a “loose and stupid” individual.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
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