Posts

FOMC Decision: Will The Fed Send A Dovish Signal?

Traders should be prepared for increased volatility with the Federal Reserve’s first policy decision of 2024 coming up. While no change in interest rates is expected, the Fed could adjust its monetary policy guidance which could trigger large swings. If the central bank embraces a more dovish posture, the U.S. dollar will fall. In the event of a hawkish signal and pushing back against expectations of deep and early rate cuts, the dollar should rise sharply.

The Fed’s interest rate decision will be announced at 19:00 GMT today, followed by the press conference 30 minutes later.

EUR/USD: Watch out for breaks either below 1.0790 (short) or above 1.0910 (long).

GBP/USD: Today, we will pay attention to a rise above 1.2760 which could attract buyers or a fall below 1.2640 that could increase bearish momentum towards 1.26 and further 1.2550.

Daily Forex and DAX Signals:

If you are keen to know where we put Take-Profit and Stop-Loss, if we trade on a specific day or not and how we manage open positions, subscribe to our signals.

Our trading ideas for the FOMC decision 31/1/24:

EUR/USD

Long @ 1.0860

Short @ 1.0785

GBP/USD

Long @ 1.2710

Short @ 1.2665

 

 

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.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2024 MaiMarFX.

www.maimar.co

 

Will The Fed Buoy The Dollar?

Instead of clinching in some profits on Tuesday, we had to deal with nervous price swings which have led to some losing trades.

U.S. inflation data came in largely in line with expectations but the slight uptick in underlying inflation may lead the Federal Reserve to push back on rate cuts for the next year.

Turning to the December FOMC meeting today, no changes in rates are anticipated, but the Fed could offer a hawkish guidance to avoid further relaxation of financial conditions. Over the past month, interest rate expectations have shifted in a dovish direction, with traders pricing in more than 100 bp of easing through 2024. These expectations appear extreme, given the current economic reality of job growth and still sticky inflation. If the Fed retains a hawkish bias and signals that it will not cut rates as much as the market discounted, Treasury yields could shoot higher as traders unwind dovish bets on the Fed’s forward guidance. And thus, the U.S. dollar would rise.

Today’s comments by Fed Chair Jerome Powell at the press conference which is scheduled for 19:30 GMT, could set the tone for the early weeks of 2024.

 

Daily Forex and DAX Signals:

If you are keen to know where we put Take-Profit and Stop-Loss, if we trade on a specific day or not and how we manage open positions, subscribe to our signals.

 

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.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2023 MaiMarFX.

www.maimar.co

Follow us on social media:

Facebook

Twitter

Instagram

Markets Believe In Rate Cuts Even After FOMC Statement

Federal Reserve Chair Jerome Powell was unable to convince markets of no rate cuts this year. As expected, the central bank delivered a 25bp rate hike but what mattered was the outlook after a most probable rate hike pause in June. Powell said that the FOMC does not support rate cuts but the markets didn’t believe the Fed’s comments. Instead, markets have priced in at least 3 rate cuts by December, a completely different forecast.

What is quite worrying is that such a near-term pivot would likely be a reaction to an increasingly worsening economic outlook. The U.S. dollar continued to weaken against the euro and pound.

The further outlook for the dollar remains bearish since there was no hawkish surprise from the Fed which could have lifted the battered greenback.

EUR/USD: The euro flirted with the 1.11-resistance but an upper breakout is still outstanding. The next target is 1.12.

GBP/USD: The pound stabilized above 1.25 and is currently heading towards 1.26. We see a next hurdle around 1.2650 from where sterling may correct.

Today we will have the European Central Bank decision at 12:15 and 12:45 UTC. Markets expect a neutral/hawkish 25bp rate hike by the ECB with the promise of further rate increases in the months ahead provided that inflation remains high.

Thus, the euro’s outlook remains slightly bullish but if the EUR/USD is unable to overcome the 1.1110-barrier it may correct.

 

Daily Forex and DAX Signals:

If you are keen to know where we put Take-Profit and Stop-Loss, if we trade on a specific day or not and how we manage open positions, subscribe to our signals.

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.

Fed Decision Day

It’s Federal Reserve decision day and the central bank is expected to deliver a 25bp interest rate hike and then signal a pause in its aggressive hiking path. Inflation is expected to cool more meaningful in the months ahead which could allow for the Fed to stop raising rates. However, there is room for a surprise and since the market prematurely speculates on potential rate cuts toward the end of the year, any signs for further tightening would come as a surprise and strengthen the U.S. dollar.

Thus, sustained strong inflation and jobs data could add pressure on the Fed to continue hiking, leaving the greenback’s counterparts exposed to further downside.

The most likely scenario however is that if the Fed officially hits the pause button, the U.S. dollar is likely to weaken, as traders attempt to front-run the next moves, which in this case would be rate cuts. With other key central banks, such as the ECB, still seen hiking borrowing costs a few more times this year, monetary policy divergence is expected to play against the greenback.

The Fed decision is due at 18:00 UTC, followed by the Fed press conference 30 minutes later.

Sideways direction

EUR/USD: The euro recently traded within a sideways range between 1.11 and 1.09. If we see an upper breakout above 1.11, the next target is 1.12. Falling below 1.09 could see further losses towards 1.0750.

GBP/USD: If the pound stabilizes above 1.25, we could see a run for 1.2650. A sustained break below 1.24, however, could lead to a test of the lower support area at 1.23.

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.

Monthly results 2023:

April 2023 (5 days trading only): +38 pips

March 2023: +408 pips

February 2023: +475 pips

January 2023: +123 pips

 

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2023 MaiMarFX.

www.maimar.co

Follow us on social media:

Facebook

Twitter

Instagram