Talking Points
- Review of current / active setups in heading into the FOMC rate decision
- Updated targets & invalidation levels
- Join Michael for Live Weekly Trading Webinars on Mondays at 12:30GMT
The FOMC is expected to hike rates for the second time this year by 25bps on Wednesday and heading into the release the focus is on the majors. The DXY turned just pips ahead of key support last week and the focus range into the open is 96.80-97.51.
Markets have largely priced in this hike – the focus will be on the updated quarter projections as they pertain to growth (GDP), employment and inflation. Highlighting the release will be the updated interest rate dot-plots and markets will be eyeing any shifts in the terminal (or longer-running) interest rate which currently stands at roughly 3%.
Growth was disappointing in the first quarter and although the employment picture has remained rather consistent, wages have continued to stagnate (Note that May CPI data is released just hours ahead of the Fed on Wednesday alongside retail sales). With that said, we’ll be looking for remarks by Federal Reserve Chair Janet Yellen in the subsequent presser for more forward guidance and should the committee site concerns over the inflation outlook, interest rate expectations could soften at the expense of the USD. As it stands, markets are pricing a roughly 50% chance we’ll get another hike in December. Keep in mind this week’s hike will be just the fourth since the financial crisis.
See our 2Q projections on the majors in the DailyFX Trading Forecasts.
In this webinar we discussed textbook examples of basic median-line analysis and reviewed both current and pending setups & updated technical levels on DXY, EURUSD, GBPUSD, AUDUSD, USDCAD, USDJPY, NZDUSD, EURCAD, NATGAS, Crude, Gold, GBPJPY and SPX500.
What do shifts in retail positioning hint about the broader trend? Learn how Sentiment can help your trading in this free guide !
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Key Data Releases
Other Setups in Play:
- Kiwi Rally Continues: Bullish Up-Trend Vulnerable Sub-7230
- ECB to Make-or-Break EURJPY – Watch This Range
- EUR/USD Stalls at Resistance Ahead of ECB, Comey
- AUD/USD Bullish Reversal in the Spotlight as RBA Takes Center Stage
---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list.
