Get ready for the latest on the Federal Reserve’s upcoming decision. In a surprising move, the Fed is expected to keep interest rates unchanged for the first time since embarking on an aggressive tightening cycle. But hold your horses. It’s not a pivot or a pause!
The Fed may use this opportunity to signal that more rate hikes are on the horizon, depending on how the economy evolves, financial stability, and inflation trajectory. With a mixed bag of economic data and lingering uncertainties, caution is the name of the game. While the Fed will likely skip a rate increase this time, they may hint at the need for one or two more hikes by the end of 2023. It’s a delicate policy compromise amid strong employment and inflation concerns. Stay tuned for the Fed’s policy statement and projections, and listen out for Chairman Powell’s press conference. Remember, no extended pause or rate cuts are expected for now. So buckle up and keep an eye on the ever-changing forex landscape!
US DOLLAR – Daily Timeframe
In line with my analysis last week, the US Dollar declined heavily from the pivot zone and resistance trendline. From all indications, the price is expected to continue on that downward path until it reaches the demand zone I’ve marked out – which would be the case if the Fed keeps the interest rate steady at the end of the day. I will watch for a sharp reaction from the marked demand zone before halting my hopes of a bearish continuation.
Analyst’s Expectations:
- Direction: Bearish
- Target: 102.660
- Invalidation: 103.646
EURUSD – Daily Timeframe
The bullish movement on EURUSD is yet to reach an efficient resistance level. Therefore, as highlighted in the chart above, the only logical poise is to expect a continuation of the bullish movement until the supply zone is reached. If the FOMC rates decision turns out to be dovish, the outlined direction would be the most likely outcome.
Analyst’s Expectations:
- Direction: Bullish
- Target: 1.08595
- Invalidation: 1.07501
GBPUSD – Daily Timeframe
GBPUSD has reached a crucial resistance level after commencing a solid rally from the 100-Day moving average, which on a regular day would imply a possibility of a bearish movement. However, in this case, we may see the price break clearly above that resistance level owing to the press release from the FOMC meeting later today. The interest rate is expected to play a vital role in the eventual outcome of the GBPUSD forecast.
Analyst’s Expectations:
- Direction: Bullish
- Target: 1.27401
- Invalidation: 1.25084
USDJPY – Daily Timeframe
USDJPY is inching closer to a major rally-base-drop supply zone and has been rejected from that area recently. Pending the release of the Fed interest rates figures, I believe we will see a decline of buying pressure from the USD, leading to a bearish momentum overall.
The confluences for this position include;
The resistance trendline
The rally-base-drop supply zone, and
The previous rejection from the supply zone
Analyst’s Expectations:
- Direction: Bearish
- Target: 136.494
- Invalidation: 141.014
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
