Today’s U.S. session trading is all about the FOMC, yo!
Will Powell and his team finally hint at their tapering schedule?
Before moving on, ICYMI, today’s Asia-London session watchlist checked out AUD/JPY’s observable downtrend ahead of the BOJ’s policy announcement. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- U.S. housing starts beat expectations in August
- Australian regulators closely watching home loan boom-RBA
- BOJ keeps policy steady, offers bleaker view on exports, output
- BOJ Governor Kuroda’s comments at news conference
- Oil prices rise over $1 after report of big draw in U.S. crude stocks
- Evergrande onshore unit expects to pay bond interest on time
- Global traders given Evergrande reprieve as PBOC adds liquidity
- U.S. House approves bill to suspend debt limit, fund government
- Risk-sensitive currencies perked up by Evergrande, dollar anchored before Fed
- Nikkei hits two-week low on caution before U.S. Fed meet
- European shares rise on Evergrande relief, gains in travel & leisure
Upcoming Potential Catalysts on the Economic Calendar:
- U.S. existing home sales at 2:00 pm GMT
- U.S. FOMC statement, dot plot, and projections at 6:00 pm GMT
- FOMC’s presser at 6:00 pm GMT
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: USD/CHF
With no other major economic report on the docket, all eyes will be on the U.S. Federal Open Market Committee (FOMC)’s September policies.
Markets expect Governor Powell and his gang to be more specific about their plans to take the pedal off the metal in the foreseeable future. Specifically, they expect to hear some sort of schedule from the Fed members.
But wait, there’s more! Aside from their interest rates and tapering plans, we’ll also hear about the FOMC members’ interest rate projections and economic forecasts.Deets on the Fed’s tapering schedule could boost the dollar across the board including a bounce for USD/CHF.
That’s right! See, USD/CHF is trading near .9225, which lines up with a recently broken range resistance and the 61.8% Fib retracement of the recent upswing.
If the Fed is comfortable enough with Uncle Sam’s growth to implement tapering or think about rate hikes, then we could see USD/CHF bounce back to its September highs.
If Powell and his team emphasize caution, however, or if we see a buy-the-rumor, sell-the-news situation, then USD/CHF could trade down to the trend line support or even the .9150 mid-range support on the 1-hour time frame.