USD: FOMC and PPI impact on the Market

USD: FOMC and PPI impact on the Market

2023-12-14 • Updated

The U.S. dollar, as gauged by the DXY index, experienced a significant drop of nearly 0.9% yesterday. This decline was driven by a substantial fall in U.S. Treasury rates following the Federal Reserve's unexpected dovish guidance. The Fed's departure from the anticipated outcome caught investors off guard, leading to a swift reversal in the market.

In its final meeting of the year, the U.S. central bank maintained current borrowing costs at multi-decade highs. However, a notable shift in strategy became evident as the Fed embraced a more lenient view of inflation and acknowledged discussions about potential rate cuts. The Summary of Economic Projections revealed a possible easing of 75 basis points in the coming year, aligning more closely with the market's outlook.

EURUSD - D1 Timeframe

EURUSDDaily-1412.png

The Daily timeframe of EURUSD chart presents a sharp bullish movement as a result of the aftermath of the FOMC interest rate. Due to the spontaneous nature of the price action, it appears that a lot of retail traders will be aiming for a sell in order to catch the retracement of the move, in my view, however, price has not yet reached a reliable zone for a proper retracement to happen; hence, the bullish pressure continues.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.09570

Invalidation: 1.08705

GBPUSD - D1 Timeframe

GBPUSDDaily-1412.png

In a similar manner to what we already analyzed on the EURUSD chart, the daily timeframe chart of GBPUSD experienced the same bullish spike in the price action. And at the moment, my sentiment remains bullish, since price has not yet reached a key level from whence a reversal could likely take place.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.27191

Invalidation: 1.26133

AUDUSD - D1 Timeframe

AUDUSDDaily-1412.png

AUDUSD is one chart I’m personally watching closely. At the moment, I am convinced that the bullish momentum is yet to reach its destination, and as such, sentiment remains bullish. However, based on the reactions observed as soon as price reaches my key level, I am quite confident the market would make a reversal.

Analyst’s Expectations: 

Direction: Bullish

Target: 0.67550

Invalidation: 0.66631

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.

TRY TRADING NOW

You can access more trade ideas and prompt market updates on the telegram channel.

Similar

CAD: Markets Await GDP Release
CAD: Markets Await GDP Release

During the Asian session on Wednesday, the USD/CAD pair rebounded after two days of losses, reaching around 1.3590. This uptick is fueled by a stronger US dollar and lower crude oil prices, which put pressure on the Canadian dollar. The decline in Western Texas Intermediate (WTI) oil prices to approximately $80.70 is attributed to...

Trade of The Week: AUDNZD Trade Breakdown
Trade of The Week: AUDNZD Trade Breakdown

The Australian Dollar (AUD) rebounds on Monday, despite a slight dip in the US Dollar (USD) and higher US Treasury yields. Investors are eyeing Australian monthly Consumer Price Index (CPI) data for February and US Gross Domestic Product (GDP) for Q4 2023. The AUD gains momentum as the ASX 200 Index rises, especially in mining and energy sectors. Additionally, the Aussie...

XAUUSD: Markets Slow Down Ahead of NFP
XAUUSD: Markets Slow Down Ahead of NFP

Gold prices rose on Monday as the US Dollar weakened amidst speculation about potential Federal Reserve rate cuts starting in June. This weakened Dollar was partly due to improved risk sentiment pushing US Treasury yields lower. Despite facing challenges from declining yields, gold prices recovered to nearly $2,170 per troy ounce, driven by the Dollar's weakness. Federal Reserve Chair...

Latest news

USD: Powell Speaks on Cutting Interest Rates
USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera