High Impact Events – July 2021 Week 2 #OPEC #FOMC Meeting Minutes

Happy Independence Day America !!

This weekend is the 4th July weekend and tomorrow is a public holiday i.e. stock market is closed.

The OPEC JMMC meeting was extended from 2nd July to 5th July probably to lessen impact on the stock market due to any decisions made by OPEC.
But really, with the US focus on net carbon emissions to zero by 2050 and US Shale acting as alternative to crude oil, any decision by OPEC would have limited impact on equities as oil and gas investments have decreased year over year.


For both the PMI and FOMC Meeting Minutes, the more hawkish the tone, the more positive impact will be on the dollar index.

Hawkish tone means the Fed is guarding against inflation (i.e. raising rates). Dovish tone is the opposite of Hawkish.

Base on technical analysis, the dollar index had just experienced a double top follow by a W shaped reversal. The W shape reversal was due to the long term hawkish tone of the Fed back in June (i.e. announcing the bringing forward of the 2 rate hikes in 2023 instead of 2024). Refer to my post here for the recap.

Now its on a minor sell off trend. The sell off is probably due to profit taking before the PMI and FOMC meeting minutes this week. Expect the dollar index however to rebound at 91.81 after the sell off though as the index seems to taking the long term view of the Fed positioning compared to stocks.

Refer to my post here for the short and long term positioning of the Fed with regards to inflation.

The W shape reversal of the dollar index indicates the start of a bullish trend for the dollar index – which has already started a bearish trend for gold. This latest development had some impact on my portfolio as i currently do have some gold holdings.

Gold is turning bearish ! Notice the 20 EMA cutting over the 40 EMA and both pointing downwards?

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