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
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • $USD resistance putting up a fight around $NFP shorter-term, big question is whether buyers can hold up support around this level through today, lots of jostling on st charts (img 2) $DXY https://t.co/htIr1GaOvd https://t.co/bJPA6UeVGV
  • $EURUSD has headed lower today following a strong beat in US NFPs, hitting an intraday low around the 1.1900 level. The pair is currently trading at its lowest levels since late November. $EUR $USD https://t.co/XDMu4fEsJP
  • Commodities Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 3.30% Gold: 0.02% Silver: -0.69% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/1vZEcB2s9V
  • The good NFP number this morning helped the Nasdaq 100 ($NDX) with a generous bullish gap, but we have unwound all the gains already https://t.co/lDm6VXegyn
  • 🇨🇦 Ivey PMI s.a (FEB) Actual: 60 Previous: 48.4 https://www.dailyfx.com/economic-calendar#2021-03-05
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.01%, while traders in Germany 30 are at opposite extremes with 65.64%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/q3gbYf0aeX
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 3.23% Gold: -0.13% Silver: -0.74% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/wepezTNX1A
  • $WTI Crude Oil is now trading right around the 66.00 level, at its highest point since April of 2019. $OIL $USO https://t.co/fA3XVobFms
  • Heads Up:🇨🇦 Ivey PMI s.a (FEB) due at 15:00 GMT (15min) Previous: 48.4 https://www.dailyfx.com/economic-calendar#2021-03-05
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: 0.98% Wall Street: 0.94% FTSE 100: 0.78% France 40: -0.00% Germany 30: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/YQgZInajKl
Hawkish Fed Rhetoric to Keep EUR/USD Capped by December High

Hawkish Fed Rhetoric to Keep EUR/USD Capped by December High

David Song, Strategist

- Federal Open Market Committee (FOMC) to Keep Rates at 0.50% to 0.75%.

- Fed Fund Futures Projects 70% Probability for June Rate-Hike.

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

Trading the News: Federal Open Market Committee (FOMC) Rate Decision

The Federal Open Market Committee (FOMC) is expected to retain the current policy after delivering a 25bp rate-hike at the last interest rate decision for 2016, but fresh batch of comments from Chair Janet Yellen and Co. may heighten the appeal of the U.S. dollar as the central bank appears to be on course to further normalize monetary policy over the coming months.

What’s Expected:

DailyFX Calendar

Click Here for the DailyFX Calendar

Why Is This Event Important:It seems as though the FOMC will sit sidelines during the first-half of 2017 as officials wait for further details on the Trump administration’s economic agenda, but the majority may continue to endorse two to three rate-hikes for 2017 as most members ‘anticipate that inflation would rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipated and the labor market strengthened further.’ In turn, Fed Fund Futures may continue reflect market expectations for a June rate-hike, and the committee may reiterategradual adjustments in the stance of monetary policy would be appropriate’ as Chair Yellen sees the central bank ‘closing in’ on its dual mandate.

Expectations: Bullish Argument/Scenario

Release

Expected

Actual

Core Personal Consumption Expenditure (YoY) (DEC)

1.7%

1.7%

Consumer Price Index ex. Food and Energy (YoY) (DEC)

2.2%

2.2%

Average Hourly Earnings (YoY) (DEC)

2.8%

2.9%

Sticky price growth accompanied by signs of stronger household earnings may encourage the FOMC to adopt a more hawkish outlook for monetary policy, and the fresh comments may heighten the appeal of the greenback should Fed officials adopt an improved outlook for the U.S. economy.

Risk: Bearish Argument/Scenario

Release

Expected

Actual

Durable Goods Orders (DEC P)

2.5%

-0.4%

Advance Retail Sales ex. Auto (MoM) (DEC)

0.5%

0.2%

Non-Farm Payrolls (DEC)

175K

156K

Nevertheless, easing job growth along with the slowdown in private-sector consumption may push Fed officials to endorse a more dovish tone this time around, and the dollar may struggle to hold its ground should the policy statement talk down bets for a June rate-hike.

For a Fed Preview, Join DailyFX Currency Analyst David Song for LIVE Analysis!

How To Trade This Event Risk(Video)

Bullish USD Trade: FOMC Stays on Course to Implement Higher Borrowing-Costs

  • Need red, five-minute candle following the rate decision to consider a short EUR/USD trade.
  • If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
  • Set stop at the near-by swing high/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.

Bearish USD Trade: Fed Officials Adopt Cautious Outlook

  • Need green, five-minute candle to favor a long EUR/USD position.
  • Implement same strategy as the bullish dollar trade, just in the opposite direction.

Potential Price Targets For The Release

EURUSD Daily

EUR/USD Daily Chart

Chart - Created Using Trading View

  • After finally closing above the Fibonacci overlap around 1.0780 (100% expansion) to 1.0800 (23.6% retracement), EUR/USD stands at risk of making a more meaningful run at the December high (1.0873), but the broader outlook remains confined by the downward trend carried over from the previous year; the Relative Strength Index (RSI) highlights a similar dynamic as it preserves the bearish formation from 2015, with the oscillator showing signs of exhaustion as appears to be turning around ahead of overbought territory.
  • Interim Resistance: 1.0880 (61.8% expansion) to 1.0910 (38.2% expansion)
  • Interim Support: 1.0340 (2017-low) and 1.0370 (38.2% expansion)

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)

DEC

2016

12/14/2016 19:00 GMT

0.75%

0.75%

-96

-113

December 2016 FOMC Interest Rate Decision

EUR/USD 5-Minute

EUR/USD Chart

Chart - Created Using Trading View

The Federal Open Market Committee (FOMC) raised the benchmark interest rate by 25bp to a fresh target range of 0.50% to 0.75%, with the majority of central bank officials projecting two to three rate-hikes for 2017. As the central bank reiterates ‘inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further,’ it seems as though Chair Janet Yellen and Co. will stay on course to implement higher borrowing-costs over the coming months, but the central bank looks poised to reestablish its wait-and-see approach at the start of 2017 amid the uncertainty surrounding the fiscal outlook. The U.S. dollar rallied against its major counterparts following the Fed rate-hike, with EUR/USD pushing below the 1.0600 handle to end the day at 1.0533.

If you’re looking for trading ideas, check out our Trading Guides

Read More:

COT-Crude Oil Record Spec AND Hedger Positions

DailyFX Roundtable: BoJ, Fed and BoE Preview

GBP/USD to Take Cues From FOMC/BoE Interest Rate Outlook

Technical Weekly: Is USD/CHF the Tell?

--- 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