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Forex Strategy Video: Determining Market Bias Ahead of FOMC

Forex Strategy Video: Determining Market Bias Ahead of FOMC

2013-10-29 19:41:00
John Kicklighter, Chief Currency Strategist
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Talking Points:

• Event risk does not always have a straightforward impact on the markets, it is shaped by bias

• Heading into the FOMC rate decision, the S&P 500 has soared suggesting a more dovish outlook

• A recent rebound for the USDollar may temper a bullish response to a surprise 'hawkish' Fed stance

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Fundamental event risk can generate meaningful volatility and trend development even when the outcome seems unchanged. Just as critical to events like the upcoming FOMC decision as the 'print' itself is the market bias going in. We see this important aspect to fundamental trading play out with events that generate far more activity than actual data prints would imply; the complete disarming of major market events; and even a reconfiguration of what data matters (as is the case with NFPs). In today's Forex Strategy Video, we walk through how to establish the market's bias as well as discuss how it can shape activity with a timely example in the FOMC rate decision.

Watch the FOMC rate decision Live in DailyFX-Plus or discuss general strategy for event risk like this with DailyFX analysts in DailyFX on Demand.

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

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