With FOMC on Wednesday during the New York session, we take a look at what to expect and then preview each of the majors daily charts. Keep an eye on the Vantage FX Twitter and Facebook Page over the next few days as we take a look at the charts in more detail through the week leading into the meeting.
As we said this morning in the Vantage FX Daily Market Update: FOMC Monday post, while lift off on interest rates probably isn’t yet in play, it’s the Fed’s rhetoric out of the meeting that will be hugely influential in how the US Dollar behaves heading forward from here.
Economists surveyed suggest that still 80% believe that the Fed will move to hike rates in September, meaning that a clear statement of intent could be given on Wednesday. The Fed has spoken before about limiting market surprises so a hawkish tone could signal liftoff is imminent.
With this in mind, the USDX Daily is sitting at an interesting point. In the short term, the daily candle that left that long wick into previous resistance now being tested as support tells me that the buyers are still in charge of this market heading into the week.
If however the Fed fails to give any indication of a September hike, any early move that has been priced into the US Dollar will look to be unwound across the majors. With the up trend technically still in tact, a test of trend line support on a less hawkish than expected rhetoric could be an opportunity to get long or at least manage your risk around if price feels heavy.
Just remember that the day after FOMC, we get the US Q2 GDP number. This will be most significant if again the Fed delays in their rhetoric, then the GDP number or revision beats expectations.
Over the next few days leading into Wednesday New York’s FOMC meeting, we will take a look at the above charts in detail.
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Dane Williams – @VantageFX
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