What We Expect from USDX and Oil

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San Francisco Fed President John Williams expressed his point of view on why the Fed should raise interest rates in 2016 in his recent interview.

So, just cutting to the chase here, does that gradual path of rate increases include any this year, in your view?

“In my view, it does.”

Williams is actually a non-voter on this year’s Fed policy setting panel, and Yellen was his boss at the San Francisco Fed before she was back to the top job back in 2010. So their views are likely to come from a shared a point of view.

USDX daily

USDX daily

But the US Dollar has heard these sorts of remarks before and didn’t really react to the headline.

No real trading opportunity developing from this one, but worth noting how certain factions within the Fed are thinking nonetheless.

On the other hand, one headline that has moved markets was in Oil. The Saudi Arabian Oil Minister said that OPEC members MAY discuss action that may be required to stabilise the price of Oil during INFORMAL meetings set down for September.

Oil 15 minute

Oil 15 minute

Ping! …and Oil goes vertical on the day.

I’ll leave it up to you to determine in which direction the biggest chance of disappointing the market lies. The Saudi’s certainly do have a certain history after-all.

Oil daily

Oil daily

The bearish channel here on the daily chart is a little bit subjective due to price breaking out of the bottom, but the marked starting points of the channel are too clean to not take notice.

There’s a bit of market sensitive news on the economic calendar tonight, so make sure you have your News Terminal on the screen next to your charts and protect your account heading into the weekend.

Enjoy!

This Friday

NZD Retail Sales q/q

CNY Industrial Production y/y

EUR German Prelim GDP q/q

USD Core Retail Sales m/m

USD PPI m/m

USD Retail Sales m/m

USD Prelim UoM Consumer Sentiment

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This is a guest post originally appeared on Vantage FX. Reposted with permission.

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