Fed to Cut Rates by 25 or 50 Bps?
The EUR/USD tested the area around 1.1150, while the GBP/USD corrected its gains after a test of its recent resistance at 1.3230.
All eyes turn to the Federal Reserve decision today at 18:00 GMT.
While a 25bp rate cut is a done deal, the sentiment has shifted towards a bigger 50bp move. Depending on the accompanying tone from FOMC policy makers, a more aggressive rate cut could negatively affect the greenback and thus, push its counterparts higher. The Fed’s press conference will also be of high interest, as it could offer clues about the rate cut path. Strong comments about the economy will influence the dollar’s movement.
If the Federal Reserve opts for a bigger 50bp rate cut, the EUR/USD could challenge the 1.12 hurdle in a next leg up.
If the Fed opts for a 25 bp cut, the dollar might strengthen temporarily, causing a potential correction in the EUR/USD and GBP/USD. The euro’s next support is seen at 1.10 and 1.0950, whereas the cable’s lower support area is seen at 1.3120.
Expect heightened volatility today.
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Our trading ideas for today 18/9/24:
EUR/USD
Long @ 1.1165
Short @ 1.1085
GBP/USD
Long @ 1.3185
Short @ 1.3140
Settings for all trades today: SL 25, TP 100
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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