The Fed, as expected, raised rates by 75 basis points (0.75%) on Wednesday. Powell’s press conference was seen as bearish – he was focused on raising rates higher, for longer, than previously. This isn’t an interpretation, Powell himself said this, as relayed by Wolf (Source – WolfStreet); “What I’m trying to do is make sure our message is clear: we think we have a ways to go. Rates have to go higher and stay higher for longer.” Higher for longer. Pretty clear, yes?
By Friday, the chart showed what short-term rates looked like, with the Fed Funds rate in black. Perhaps the 1-year rate (4.74%) is “the forecast” where the market thinks the Fed might stop? At least for right now, anyway.
So, the Fed caused a fuss on Wednesday, but then something funny happened on Friday. Several items started rallying during Asia trading hours, and then when Payrolls hit at 08:30 Eastern (headline: +261k, expected +210k), things just went a little bit nuts.
Partly, it was about currency: the buck plunged 2.03 [-1.80%] on Friday, a huge move which launched right after the payroll release. The big red candle on the daily chart below gives you an idea of the magnitude of the move on Friday. For the week, the buck rose 0.17 [+0.15%], ending the week back below that 50 Moving Average line once more. Friday’s dollar plunge wiped out most of the gains from Monday through Thursday.
Gold also rallied strongly on Friday, up a big 45.70 [+2.80%] to 1676.60, and gold was up 31.80 for the week. Here’s another daily chart just to give you a sense of just how strong gold’s rally was on Friday. It looks like gold ran into resistance at the 50 MA. Gold appears to be trying to move back into an uptrend, although I still want to see a close above the 50. And a close above the previous high would be good too. Gold = anti-dollar. Which is why they hate gold so very much.
Silver looked much stronger than gold, and in fact, it has looked stronger than gold for quite a while now. How can I tell? Silver’s 50 MA is roughly flat, while gold’s 50 MA is still declining. Silver is above its 50, while gold remains below.
by westcoastjan 
