USD SURGE: WHAT’S NEXT? Why Is the S&P 500 Falling?

We are producing this video one day early this week, and you will see why here.

Last week I was telling clients and students to watch Kevin Warsh's speech on Friday at the Jackson Hole World Economic Forum, and watch the charts.

Look what happened on every USD chart!

In today’s GCI Market Outlook, let’s take a look at Forex trading on the AUDCAD, WTI and Brent Crude Oil, the S&P500, Gold, XAUUSD, Silver, XAGUSD, NZDUSD, AUDUSD and EURUSD.

Just a reminder that these videos are intended as observational and educational, and are not to be considered as trading advice.

Warsh's speech was significantly more hawkish than the market had expected.

He effectively said that if underlying inflation isn't convincingly heading toward the Fed's 2% target, the Fed may need to do more — including raising rates.

This caught the market by surprise, as this attitude is definitely not shared by the White House.

The next Interest Rate decision is due 16 September, but anything can happen between now and then, including disruption by the White House, so watch your risk management and the news.

Depending on which time frame you view, and which symbol, we have mixed strength and weakness in USD pairs.

If you want to trade against USD strength in the short term, we have price action on NZDUSD rebounding from the lower trend line with an oversold stochastic oscillator.

A similar situation with AUDUSD.

Gold and Silver fell as well, but let’s wait for the fallout before we assume there will be an automatic reversal.

The S&P 500 fell along with most indices as corporations don’t like talks of interest rate rises.

To add insult to injury, aggression is accelerating in Iran, which saw the price of crude oil gap to the upside, retreat a bit, then move higher still.

This is a case where we need to wait for some good news before going short and, as we can see, our technical indicators may not help us here.

We have some important economic news this week with a US PMI tomorrow, Australian GDP tomorrow, and important interest rate decisions from New Zealand and Canada.

The RBNZ is expected to raise rates, and we just saw a big pullback in NZDUSD.

NZD has been the strongest currency for weeks, so we will see if the announcement drives NZD stronger.

Looking at our favourite range trade, AUDCAD, we see price has tried to break resistance but has moved lower.

This CAD weakness has come from the insane US/Canada trade talks, so we may see movement if the American trade negotiators want to talk constructively.

If we get positive news from the Bank of Canada, we may be able to get back into this range trade.

That’s all for now.

CFDs and FX are leveraged products, and your capital may be at risk.