The market is eagerly awaiting Ben Bernake's testimony to Congress later today and will be scrutinising his statement for clues regarding the future of Quantitative Easing and US interest rates.
Any strong hints suggesting a timetable for tapering QE this year will see a dollar rally and gold sell off, however we will probably see gold rise if Bernanke suggests tapering is further off than the markets currently expect. The Fed Chairman has to perform a fine balancing act to prevent a surge in interest rates and a hard stock market crash whilst keeping the prospect of QE tapering at the forefront.
Equities are again challenging their all time highs and oil is holding onto recent gains and trading above $105 a barrel. The dollar has sold off significantly since the FOMC minutes last week suggested tapering of QE was still uncertain, this could all change today depending on Bernanke's testimony.
An interesting day ahead.
Today's video for subscribers looks at our strategy for our next trade in detail and considers Bernanke's statement to Congress in relation to this