In last night’s final policy decision for the US Election, the Federal Reserve left interest rates unchanged.
However, the FOMC Statement did in fact signal that on the back of increased growth and a pickup in inflation, the bank was still on track to make their move in December.
“The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.”
Now remember that in the September FOMC Minutes, Fed chair Janet Yellen indicated to the market that a hike was more than likely if economic data remained on the current trajectory?
This month’s statement was totally in line with previous communication from the Fed and their guidance toward a December hike remains consistent. While that’s very good for market stability, in terms of being able to trade large moves on market repricings… not so much.
Just keep in mind that last night’s FOMC meeting comes just a week or so out from their own presidential election and as we have focused on already, the potential market shockwaves caused by a Trump victory are certainly playing a part in the Fed’s thinking, whether the will publicly say it or not.
Taking a look at some charts, we’ll focus today on EUR/USD as the USD focused major pair going with today’s theme:
We’ve looked at this EUR/USD monthly before with a focus on that hugely significant higher time frame support level.
Price just isn’t going to crack and say goodbye to a level of that significance this close to a potential Fed hike (as much of a lock as it may be), let alone the possibility of a Trump presidency.
Zooming into the daily and with price bouncing back up to re-test previously broken intra-day support as possible resistance, we have an in play level.
What are your thoughts on managing EUR/USD from here? Mention @VantageFX on Twitter and don’t be shy in sharing your own charts and setups for a RT.
On the Calendar Wednesday:
JPY Bank Holiday
AUD Trade Balance
GBP Services PMI
GBP EU Membership Court Ruling
GBP BOE Inflation Report
GBP MPC Official Bank Rate Votes
GBP Monetary Policy Summary
GBP Official Bank Rate
GBP BOE Gov Carney Speaks
USD Unemployment Claims
USD ISM Non-Manufacturing PMI
Take advantage of opportunity in the market with a Vantage FX Forex demo account.
Dane Williams – @VantageFX
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