Mixed Markets, Wait and See

October 28, 2015

Mixed Markets, Wait and See:
The US Dollar pulled back into its weekly range against the majors as US data missed expectations and tomorrow’s FOMC meeting saw markets continue to settle and square up.

US data overnight included a 1.2% fall in Core Durable Goods orders for the previous month, as well as a drop in Consumer Confidence in October. CB Consumer Confidence is measured as an index based on surveyed households which was expected to stay steady around 102.5 but instead missed down at 97.6.

Just be aware that these numbers have zero bearing on the Fed tomorrow. With no press conference scheduled after the meeting, the statement is the only opportunity that they will get to convey to markets the message they want to send. Will they still hint at the possibility of a December hike? What about any changes in their assessment of the economy? These are both major points to look out for when the statement is released.

Finally, keep an eye on the ‘global developments’ section of the statement. As has been the case in past meetings, the Fed has made a point of this line and if they do again, it could be the kicker that the doves were looking for to send the USD down. We’re waiting and seeing for now.

Elsewhere, the UK Preliminary GDP release showed signs that a more prolonged economic slowdown could be ahead.

“GBP Prelim GDP q/q (0.5% v 0.6% expected)”

The previous quarter’s number was 0.7%, showing both an actual decline as well as a greater decline that expected. Cable fell following the release of the data but optimism around domestic indicators such as service demand and the fact that the BoE isn’t likely to take anything from the numbers saw the pair take back its falls before being hit by the USD data.

GBP/USD Daily:
Click on chart to see a larger view.


On the Calendar Wednesday:

USD FOMC Statement
USD Federal Funds Rate


Chart of the Day:
When I read these reports and see ugly line charts that aren’t easy on the eye, I immediately flick to another window. So if I’ve lost you, I understand but if you are still reading them lets take a look at why I included it in today’s chart of the day:

AUD/USD Weekly:
Click on chart to see a larger view.

I had to zoom out this far to show the weekly trend line that is still in play when we zoom into the hourly chart.

AUD/USD 4 Hourly:
Click on chart to see a larger view.

So now we can zoom back in again and see what’s happening around the line in more detail. I’m going to leave this one open and just ask you a question.

Do you see opportunity trading Forex?

Dane Williams – @VantageFX

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