Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Pre-FOMC Trade Setups in USD-pairs

Pre-FOMC Trade Setups in USD-pairs

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- USDOLLAR uptrend remains - only tentatively, though.

- GBPUSD breakdown, USDCAD breakout hinge on Yellen.

- See the March forex seasonality report for trends in the QE-era.

Comparatively, the strength of the US economy has gone unmatched over the past year, especially with regards to the labor market: the unemployment rate currently sits at 5.5%, at the topside of the Fed's central tendency range for "full employment." While the ECB, BoJ, and PBoC grapple with easing measures, the US Dollar has surged higher, as investors position themselves for the first rate hike in a decade.

Today, even while the main interest rate is expected to be held at 0.25%, the Fed will likely alter any restrictive language - "patience" - opening the door for a mid-year rate increase. However, the outcome on the US Dollar is not so certain, in a market handicapped by overly bullish traders in the greenback, and extreme bearishness seen in positioning elsewhere.

Even if the Fed is switching its policy stance to a 'meeting by meeting' basis for determining if/when to raise rates, recent consumption and inflation data has been so poor, that US data relative to expectations is off to its worst start in five years. Indeed, the greenback's path over the coming days and weeks may hinge on the tone of Fed Chair Yellen's press conference rather than anything else, considering how 'priced in' a rate hike sometime between June and September is.

See the above video for technical considerations in EURUSD, GBPUSD, AUDUSD, and USDCAD.

Read more: Stage Set for EUR Short Covering Move Around FOMC?

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES