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.

Free Trading Guides
EUR/USD
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
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
Wall Street
Mixed
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Cable is back off last Friday’s lows and looks to have set-up short-term support just above 1.2200. Get your $GBPUSD market update from @nickcawley1 here: https://t.co/R6mtP38uQs https://t.co/UdWHjhOeFS
  • Yellen: - #coronavirus 'war bond' may be an appropriate approach for the US
  • Yellen: - May be worth reconsidering Fed asset buying powers
  • Yellen: - Fed not legally allowed to buy stocks - There will be a lot of stress on banks
  • Yellen: - Fed providing massive support - Fed has 'pulled out all stops' - Banks must meet credit needs of the whole system
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.55% 🇳🇿NZD: 1.54% 🇨🇦CAD: 0.40% 🇨🇭CHF: -0.15% 🇪🇺EUR: -0.16% 🇯🇵JPY: -0.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/MwJ5eOesPu
  • Yellen is worried we may not see a quick recovery
  • $GBPUSD bounced off the 1.2200/1.2210 area in early trade, despite weekend news that UK PM Boris Johnson had been hospitalized with ongoing coronavirus symptoms. Get your GBP/USD market update from @nickcawley1 here: https://t.co/KcRiWwKaFH https://t.co/H30t64pH96
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Germany 30: 5.39% US 500: 4.54% France 40: 4.49% Wall Street: 4.47% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/4o6K6izS7B
  • Yellen says that the US jobless rate could rise to 12%-13% and beyond
EUR/USD to Take Cues From Updated Fed Forecasts on Another 9-1 Split

EUR/USD to Take Cues From Updated Fed Forecasts on Another 9-1 Split

2016-06-15 12:00:00
David Song, Strategist
Share:

- Federal Open Market Committee (FOMC) Largely Expected to Retain Current Policy.

- Will Kansas City Fed President Esther George Remain the Lone Dissenter?

For more updates, sign up for David's e-mail distribution list.

Trading the News: Federal Open Market Committee Interest Rate Decision

Even though the Federal Open Market Committee (FOMC) is widely anticipated to preserve its current policy in June, the updated economic projections coming out of the central bank may drag on the greenback and spark a near-term rebound in EUR/USD should Chair Janet and Co. curb their outlook for growth and inflation.

What’s Expected:

DailyFX Calendar

Click Here for the DailyFX Calendar

Why Is This Event Important:Moreover, a downward revision in the Fed’s interest-rate dot plot may produce near-term headwinds for the greenback as market participants push out bets for the next Fed rate-hike, and we may see another 9 to 1 split within the committee as the majority appears to be in no rush to further normalize monetary policy.

Expectations: Bearish Argument/Scenario

Release

Expected

Actual

Consumer Credit (APR)

$18.000B

$13.416B

Non-Farm Payrolls (MAY)

160K

38K

Gross Domestic Product (Annualized) (QoQ) (1Q P)

0.9%

0.8%

Waning job growth accompanied by the slowdown in economic activity may push the FOMC to endorse a wait-and-see approach, and the dollar stands at risk for a near-term selloff should the central bank show a greater willingness to further delay the normalization cycle.

Risk: Bullish Argument/Scenario

Release

Expected

Actual

Average Hourly Earnings (YoY) (MAY)

2.5%

2.5%

Personal Consumption Expenditure Core (YoY) (APR)

1.6%

1.6%

Consumer Price Index ex. Food & Energy (YoY) (APR)

2.1%

2.1%

However, signs of sticky price/wage growth may encourage a greater number of Fed officials to vote for higher borrowing-costs, and a growing rift within the FOMC may spark a bullish reaction in the greenback as it boosts interest-rate expectations.

How To Trade This Event Risk(Video)

Bearish USD Trade: FOMC Cuts Economic Projection, Rate Dot-Plot Narrows

  • Need green, five-minute candle following the rate decision to consider a long EUR/USD position.
  • If market reaction favors a bearish dollar trade, buy EUR/USD with two separate position.
  • Set stop at the near-by swing low/reasonable distance from cost; at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is met, set reasonable limit.

Bullish USD Trade: Fed Highlights Larger Dissent, Stays on Course to Normalize Policy

  • Need red, five-minute candle to favor a short EUR/USD trade.
  • Implement same strategy as the bearish dollar trade, just in the opposite direction.

Potential Price Targets For The Release

EURUSD Daily

EUR/USD Daily Chart
  • The long-term outlook for EUR/USD remains tilted to the downside amid the diverging paths for monetary policy, but the pair may continue to retrace the decline from 2015 as the bullish trend carried over from back in November continues to take shape.
  • Key Resistance: 1.1760 (61.8% retracement) to 1.1810 (38.2% retracement)
  • Key Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

Check out the short-term technical levels that matter for EUR/USD heading into the report!

Avoid the pitfalls of trading by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders" series.

Impact the FOMC interest rate decision has had on EUR/USD during the last meeting

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

APR

2016

04/27/2016 18:00 GMT

0.50%

0.50%

-18

-17

April 2016 Federal Open Market Committee (FOMC) Rate Decision

EUR/USD Chart

As expected, the Federal Open Market Committee (FOMC) once again voted 9 to 1 to retain the current policy in April, with Kansas City Fed President Esther George dissenting against the majority for a 25bp rate-hike. The FOMC continued to promote a wait-and-see approach as ‘market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months,’ and the central bank may look to buy more time as they wait for a ‘further improvement in labor market conditions and a return to 2 percent inflation.’ More of the same from the FOMC sparked a choppy market reaction, with EUR/USD pulling back from the 1.1350 zone to end the day at 1.1319.

Get our top trading opportunities of 2016 HERE

Read More:

S&P 500: Confluence of Technical Events Bolsters Case for the Bears

US DOLLAR Technical Analysis: A Wild Open To June Is Set To Get Wilder

DailyFX Technical Focus: Flying Kiwi

NZD/USD: RBNZ Breakout Approaching Initial Resistance Targets

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

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

DISCLOSURES

News & Analysis at your fingertips.