1 Minute Market Rundown – 26th May 2022
Trade the Extremes
Crypto Comes Under Pressure
FED Retains Flexibility
The FOMC minutes came and went and the markets have summed it up quite nicely – nothing new. There were no fresh insights and all markets can’t make headway in either direction. The word we like to use to describe this market is ‘transactional.’ It feels that any trades that are being put on are for a transactional reason and no one is truly putting on a speculative trade or position.
The FOMC minutes intimated flexibility should the trajectory of the data significantly change. They however reaffirmed their stance for consecutive 50bps hikes. The markets unsurprisingly are struggling to take direction from the event.
We are now approaching that time of month where rebalancing flows will start to drive the short term market direction. Considering what equities have done this month we foresee a demand for USD in the FX space so we are looking to buy USD dips with our preferred vehicle being GBP/USD.
Crypto markets are getting hammered. No other way to describe it sadly. Ether, as I type, has taken out short term support at $1900 and is now targeting crucial support at $1700. Having lightened up crypto longs after the Terra debacle we have now bought some ETH at these levels as I expect (read: hope) $1700 will hold. The sell-off in crypto is across the board with AVAX down as much as 15% and SOL down 10%.
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