Forex Trading Library

The Week Ahead – All Eyes on the Fed

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GBPUSD falls back in the channel
GBPUSD chart: Pound slipping against the dollar, with focus on BoE rate decision amid anticipation for the Fed's decision.

The pound slipped against the dollar after progressive retail and PPI data came out of America. It will be a case of all eyes on the BoE as the subsequent decision with interest rates looms. The UK central bank has hinted at the end of its tightening cycle. With CPI data on the same day as the Fed’s decision, cable can surely see some volatility swings. With price action falling back into a bullish channel, can the trend continue the pound? 1.2700 is a necessary support, and 1.2850 is a fresh resistance.

EURUSD attempts the 500 pip recovery
EURUSD chart: Euro attempting recovery after hitting a bottom at 1.0700.

The euro has seen a momentum shift in its favour after hitting a bottom at 1.0700. After starting the year off strongly, the greenback eclipsed most of its rivals. However, with the Fed showing signs of dovish sentiment, the dollar took a back seat. This led to the euro gaining over 200 pips and breaking the 1.09 level. With the Fed’s next meeting on Wednesday, this will be the catalyst if another downturn is seen or if the pair can elevate and recover to 1.1100.

XAUUSD begins the correction
XAUUSD chart: Gold price declining from record high, impacted by robust US economic data.

Gold has witnessed a slight decline in price action as it falls away from its record high. Robust US economic data has recently seen a slowdown in movement after eight days of progression for the yellow metal. As speculations on the terminal rate run wild, traders are already pricing in more hawkish remarks from the Fed. An extended rally of the US dollar would further weigh on gold demand. 2140 is the closest support, and 2190 is a fresh resistance.

NAS 100 attempts another record
NASDAQ 100 chart: Pause in Nasdaq's momentum amid Fed's potential rate cut signals and concerns over rising borrowing costs.

The Nasdaq 100 pauses as the recent nonfarm payroll data shows the Fed are ready to signal cutting rates. Less stimulus being injected into the economy could weigh in on stocks. CPI data showed that America can now function as it was before the pandemic, with major tech companies exceeding earnings expectations. The global worry over bank stocks posing a systemic risk if borrowing costs keep rising is something in investors’ minds ahead of the Fed’s decision. 17600 is the closest support, and 18150 remains a crucial hurdle for a fresh high.


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