As expected from an April FOMC meeting, really nothing new to report other than a few subtle changes.
A really good comparison piece from Ryan Littlestone over at ForexLive which I highly recommend having a look at. Shows the exact wording changes side to side and talks a little bit about what that means going forward.
— ForexLive (@ForexLive) April 29, 2015
The USD was trading off it’s lows after the FOMC statement was released but was unable to offset the relentless USD weakness we’ve seen over the last week.
This weakness was last night compounded by a dismal US GDP reading over the first quarter, with the -0.2% print a huge miss on the +1.0% that the market expected. It was actually this that did all the damage to the USD as markets expected another string of poor data to force the Fed to hold off any rate rises.
The Fed didn’t really comply and failed to provide any new clues about the timing of the first rate hike except confirming that it will be later rather than sooner. The major line to take out of the statement being that the central bank acknowledged that economic growth slowed during the winter months as job growth moderated and spending eased.
How about that weather huh!
We take a further look at the USDX in the Chart of the Day section below.
On the Calendar Today:
This morning we’ve already seen New Zealand’s RBNZ keep rates on hold at 3.5% as expected. Wheeler did however add that “weaker demand may warrant easing down the line”. Something that the Kiwi hasn’t taken very well as you can see from this AUD/NZD chart. Remember when we were talking about a drop through parity?
Click on chart to see a larger view.
Our eyes now turn to Japan with a BoJ monetary policy statement and press conference.
JPY Monetary Policy Statement
JPY BOJ Press Conference
USD Unemployment Claims
CAD BOC Gov Poloz Speaks
Chart of the Day:
We continue on yesterday’s look at the US Dollar Index with a look at overnight developments and where the correction now sits on the chart.
Click on chart to see a larger view.
The correction is now sitting at a very important zone. Price is sitting both on trend line support, as well as last month’s spike low. The fact that the major pairs such as EUR/USD and GBP/USD are all breaking major resistance levels shows that this USD correction definitely has some merit to it but this level is key.
If it holds, then normal service will resume and we’ll be looking for the majors to resume their down trends, but if it goes we could get some major corrections flowing through the forex market.
Mark it and watch it.
Let us know what you’re watching or trading? Leave a comment below or mention @VantageFX on Twitter.
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