RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

“You still see solid growth, but there’s growing signs of a slowdown, and it’s a bit concerning” – Fed Chairman Jerome Powell

Did we just hear the beginning groundwork being laid for a less “hawkish” FOMC? Perhaps, and we’re not surprised. This is a globally synchronized slowdown that we’re experiencing. China has been slowing since January (shanghai index -24% since it’s Jan peak), the Eurozone has also seen a sequential slowdown throughout the continent’s economy, led by Germany -13.5%, Italy -12.5% ytd, and Greece -8.75%. The USD is not taking the Powell’s comments lightly this morning, -60pts to 96.28 on the December contract. Furthermore, rumors that trade talks are loosening up between the U.S. and China are also feeding into a lower USD vs other major world currencies this morning. I do believe, and this is a call we’ve been making for a while now, that this is the beginning of the end of the USD rally. It’s a bold call because “the trend is your friend”, but with the U.S. (in my opinion) on the brink of a slowdown in growth and inflation, and the Fed past peak in its rate hike cycle, we believe the best day’s for the USD are now behind us. We’re going to stay bearish on the USD for the next 3-6 months with a downside target of 93.00. We’ll continue to monitor and evaluate this call on weekly basis. 

U.S. Dollar Index Weekly Chart

U.S. Dollar Index Weekly Chart

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. Prior to becoming a broker he did some individual trading on his own, where he first began to study and interpret different market strategies and ideas. In 2006 John moved over to Lind-Waldock where he began to service clients as a professional broker. He joined RJO Futures in 2011.
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