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.

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
EUR/USD
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
Oil - US Crude
Mixed
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
Wall Street
Bearish
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
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • NY Fed's GDP Nowcast model sees US Q1 GDP at 6.9% vs. 6.78% in prior week. #Fed $USD
  • Hey traders! Wrap up your week with a market update from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/zOiAQGMNzY
  • $EURGBP has strengthened today, rising back above the 0.8700 level for the first time in a week. The pair is trading near the highs set in mid April and late February. $EUR $GBP https://t.co/RSkMhvLQEQ
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.31% 🇦🇺AUD: 0.29% 🇨🇦CAD: 0.10% 🇬🇧GBP: 0.06% 🇨🇭CHF: 0.06% 🇯🇵JPY: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/OODkBySEaS
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: 0.66% Wall Street: 0.42% FTSE 100: -0.13% France 40: -0.28% Germany 30: -0.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0PTPoUF2Jz
  • #Gold has slipped to its lowest level since Tuesday today. After meeting resistance around 1,795 this morning, the precious metal fell back to trade near the 1,770 level. $XAU $GLD https://t.co/tOiSk0n6t5
  • Biden’s proposed tax hike sees investors unload profitable assets. Bitcoin intensifies losses, falls below $50,000. Get your $btc market update from @Daniela here:https://t.co/pkHFvFotbz https://t.co/1R7T4HpfQX
  • With the US data beating expectations, we have all of the major developed world economies reporting April PMIs with a significant improvement in economic activity for the current month. Seems only black swans and regulations can stop the train now... https://t.co/HpOW5ul5YW
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.92% Gold: -0.24% Silver: -0.29% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ck2iRms5Hp
  • Heads Up:💶 ECB President Lagarde Speech due at 14:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-04-23
USD Bearish Momentum Set to Continue Through January FOMC

USD Bearish Momentum Set to Continue Through January FOMC

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- The first FOMC meeting of 2018 will likely be its most uneventful one, as it is Chair Janet Yellen's last meeting before Jerome Powell takes over and a new, more hawkish composition of policymakers rotates onto the voting committee next week.

- Accordingly, without a new Summary of Economic Projections (SEP) or a press conference, there's little that the FOMC can do to stop the bearish US Dollar momentum from continuing this week.

- Retail trader sentiment has soured on the US Dollar once again.

Upcoming Webinars for Week of January 28 to February 2, 2017

Thursday at 7:30 EDT/12:30 GMT: Central Bank Weekly

See the full DailyFX Webinar Calendar for other upcoming strategy sessions

The US Dollar (via DXY Index) has slipped to fresh weekly lows and what would be a fresh low close for 2018, should it fail to rebound the remainder of Wednesday. Market participants are rightly overlooking US President Trump's first State of the Union address as, in recent history, it's been rare to see any legislative follow through on the vision the president lays out (at least as far as this analyst remembers that being the case under Obama, Bush, or Clinton).

Instead, attention is rightly tuned to the first Federal Reserve policy meeting of 2018 today. Nevertheless, it doesn't look like the US Dollar will be bothered one way or the other by the FOMC meeting, for several reasons.

For starters, the Fed prefers to make major policy changes at meetings in which they have a new Summary of Economic Projections and a press conference for their central bank head to hand-hold market participants. In this sense, the Fed is no different than the BOE (making changes at meetings with new Quarterly Inflation Reports) or the ECB (at meetings with new Staff Economic Projections).

There's another dimension to today's FOMC meeting that limits the potential for a signifcant turn in the US Dollar: it is Janet Yellen's last meeting as Fed Chair. Should she have been reappointed? Given that every Fed Chair has been reappointed over the past 39 years, and that she oversaw a successful tenure - inflation is stable at or below +2%, the unemployment rate is at cycle lows, credit risk is low, and equity markets are at all-time highs - there is a strong argument to made that she should still be at the helm.

But I digress. The reality is that Jerome Powell will be taking over the leadership next week, with a new panel of FOMC voters being introduced as well. Accordingly, market participants may not take today's policy statement too seriously: after all, many of its authors will no longer be pulling the policy levers the next time the FOMC convenes in March (and that FOMC composition should be more hawkish).

Accordingly, with neither a new Summary of Economic Projections nor a Janet Yellen press conference, the Fed won't do anything meaningful at all. Rates markets are continuing to eye March, June, and December for rate hikes this year, and the policy statement won't change that perception.

Price Chart 1: DXY Index Daily Timeframe (June to November 2017)

USD Bearish Momentum Set to Continue Through January FOMC

If nothing is going to change with the FOMC today, then there is little reason to think of today as a turning point in the US Dollar's broad downtrend. The DXY Index remains below its daily 8-, 13-, and 21-EMAs, while MACD and Slow Stochastics continue to trend lower in bearish territory. Bearish momentum is firm indeed, and until price closes back above the daily 8-EMA (no close above since January 11) then the bearish bias remains in place.

Against this backdrop, several USD-pairs look poised to continue the moves that have developed at the start of 2018. See the above video for technical considerations in the DXY Index, EUR/USD, USD/CAD, USD/JPY, and GBP/USD.

Read more: FX Markets Look to EZ GDP, Aussie & EZ Inflation, FOMC & US NFP

--- Written by Christopher Vecchio, CFA, Senior 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