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
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Mixed
GBP/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
USD/JPY
Bearish
More View more
Real Time News
  • Heads Up:🇯🇵 JPY Jobless Rate (FEB) due at 23:30 GMT (15min), Actual: N/A Expected: 2.4% Previous: 2.4% https://www.dailyfx.com/economic-calendar#2020-03-30
  • 🇬🇧 GBP GfK Consumer Confidence (MAR), Actual: -9 Expected: -15 Previous: -7 https://www.dailyfx.com/economic-calendar#2020-03-30
  • Heads Up:🇬🇧 GBP GfK Consumer Confidence (MAR) due at 23:01 GMT (15min), Actual: N/A Expected: -15 Previous: -7 https://www.dailyfx.com/economic-calendar#2020-03-30
  • $EURUSD chart positioning hints the Euro may be running out of steam following a spirited recovery but sentiment studies continue to argue for the upside.Get your EUR/USD market update from @IlyaSpivak here:https://t.co/zp2oz1G2QZ https://t.co/YsxURDW4aT
  • Frankly, I'm surprised the 'equity market related economic uncertainty index' the Fed measures isn't higher. Apologies for using the Wilshire 5000. They don't have significant SPX or Dow historical https://t.co/CioVpmmdv9
  • Market snapshot: #NZD up over 0.5% vs G10 FX heading into Asia's Tuesday trading session [delayed].
  • 🇳🇿 NZD Building Permits (MoM) (FEB), Actual: 4.7% Expected: N/A Previous: -2.0% https://www.dailyfx.com/economic-calendar#2020-03-30
  • Heads Up:🇳🇿 NZD Building Permits (MoM) (FEB) due at 21:45 GMT (15min), Actual: N/A Expected: N/A Previous: -2.0% https://www.dailyfx.com/economic-calendar#2020-03-30
  • USTR Lighthizer says G20 should stay focused on pandemic, not try to use it to push other agendas in trade or elsewhere #Tradewar
  • In a positive development, the S&P 500 did not hit limit down after this week’s open for US equity futures. Get your #S&P500 technical analysis from @JStanleyFX here: https://t.co/7LDq88mYPE https://t.co/O6njknUzvV
It’s Do-or-Die time for the Euro/US Dollar ahead of FOMC Decision

It’s Do-or-Die time for the Euro/US Dollar ahead of FOMC Decision

2013-09-13 21:45:00
David Rodriguez, Head of Product
Share:
forex_euro_us_dollar_forecast_ahead_of_fed_decision_body_Picture_5.png, It’s Do-or-Die time for the Euro/US Dollar ahead of FOMC Decision

It’s Do-or-Die time for the Euro/US Dollar ahead of FOMC Decision

Fundamental Forecast for Euro: Neutral

  • Euro breaks to fresh September highs versus downtrodden US Dollar
  • Dollar resilience nonetheless tells us most wait results of next week’s critical Fed decision
  • US Federal Reserve takes main stage in the week ahead

The Euro broke to fresh multi-week highs against the US Dollar, but the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) continues to hold key multi-month lows. All eyes now turn a highly-anticipated US Federal Reserve policy announcement to drive FX moves.

The Federal Open Market Committee (FOMC) decision on September 18 will be the major driver of currency volatility in the coming days, and European event risk is relatively limited. What could the Fed do to break the US currency and broader markets out of increasingly narrow trading ranges?

Fed Officials are widely expected to announce the start of the so-called “Taper” of the central bank’s Quantitative Easing measures. According to a Bloomberg News survey, most economists polled believe that the FOMC will cut its monthly purchases of US Treasury debt by $10 billion. Yet it’s the wide range of estimates that underlines how little we know of the Fed’s next steps. According to the same survey, 33% predict zero tapering while some anticipate as much as $20 billion in cuts.

We look to interest rate markets to guide us. US Dollar interest rate futures showed a sharp drop in Fed interest rate forecasts following a disappointing US Nonfarm Payrolls report for August. Yet the initially strong reaction to the labor data has since turned into consolidation; no one seems to be willing to make big bets ahead of the Fed.

The fact that the Euro trades near its highs and the USDOLLAR is just barely holding lows suggests that the EURUSD could break higher in the days ahead. Currency volatility has dried up in a major way, and it feels like the next big move is just around the corner.

Our retail FX sentiment-based strategies have bought into Euro strength and remain positioned for a move higher. Whether or not se see the major break depends almost completely on the Fed’s next steps. It’s difficult to predict what the FOMC might do and much less how markets might react.

In the meantime, we’ll brace ourselves for continued choppiness as currencies move in progressively smaller trading ranges. - DR

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

DISCLOSURES

News & Analysis at your fingertips.