Market

The Fed Could Signal Tapering, But Not Today | Investing.com

The FX market appeared to be taking a breather at the beginning of the week with market participants cautious ahead of today’s Federal Reserve policy decision. Consequently, there was nothing to gain for FX traders but this could possibly change today with traders bracing for higher volatility around the Fed’s statement.
 
The Federal Reserve is expected to announce it will begin trimming its monthly asset purchases before the end of the year but it will leave asset purchases untouched for several more months.
 
Nonetheless, the most likely scenario is that today’s FOMC decision will be an uneventful one since Fed Chair Jerome Powell is unlikely to hint at the timeline for tapering at this meeting, given that U.S. economic data has only just begun to pick up momentum and the U.S. Treasury market has calmed.

But as the economic recovery continues, the Fed could soon send a signal.  

In the unlikely event of a hawkish signal during Powell’s press conference or if he provides any clues about the tapering timeline, we will get a strong market reaction with the rising. However, the Fed is not expected to follow the that surprised the market with a hawkish tilt last week.

As for the tapering, most economists expect a taper to happen in the first quarter of next year with the Fed starting to signal tapering from the July semi-annual testimony.

EUR/USD

The pair remained in a tight trading range, increasing the chances for price breakouts to either side. For bullish momentum to accelerate we need to see a renewed break above 1.2115 or on the downside, a test of the current support zones at 1.20 or 1.19. If the pair remains however unable to overcome the 1.2110-barrier, chances are in favor of the bears with the focus being on the 1.1950-1.19-support zone.

GBP/USD

The failed to gather momentum and remained in a narrow sideways trading range between 1.3930 and 1.3850. If the pair falls below 1.3850, we will focus on a lower target at 1.38. A break below 1.3770 could even open the door to a deeper correction towards 1.3670. Sterling bulls on the other side, will have to wait for a significant break above 1.3930 and further 1.3960 in order to expect a higher target at 1.4070.

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.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Most Related Links :
reporterwings Governmental News Finance News

Source link

Back to top button