Market Review: United States Federal Open Market Committee Meeting
Economic calendar (highest volatility): 19th February – 23rd February 2018:
Timezone: (GMT -5:00) Eastern Time (U.S & Canada), Bogota, Lima
The team here at FintechFX opine post the dramatic global equity market plunge which took place, forex prices have lacked any solid defining trend based direction; with the United States (U.S) Dollar Index (DXY) trading pretty choppily. The bonds market however, seems to show the best trend based correlation in tandem with the recent positive U.S data releases with U.S Treasury yields hitting new highs.
This week, a similar rather choppy trading scenario is to be expected as the team here at FintechFX expect markets to hold slightly more bullish views favoring the U.S Dollar (USD) before the U.S Federal Open Market Committee (FOMC) Meeting Minutes release, and opine for a ‘sell on fact’ scenario to take place right after. Aside from the FOMC Minutes release, making headlines this week would also be Meeting Minute releases from two other major central banks, namely the Reserve Bank of Australia (RBA) and the European Central Bank (ECB). Furthermore for the week, the team here at FintechFX expect the Canadian Consumer Price Index (CPI) release to bring about some trading opportunity in regards to the Canadian Dollar (CAD).
This week, the AUD/USD presents traders with some trading volatility as the RBA Monetary Policy Meeting Minutes is scheduled to be released during the earlier half of the week. The Australian Dollar (AUD) in our opinion, is still highly undervalued and shows some signs of rising this 2018. In the light of a potentially more hawkish statement moving forward, markets are looking at the AUD/USD to regain some of it's strength which has been lost throughout the years. Nonetheless for the earlier part of the week at least, the team here at FintechFX view some opportunity to sell the AUD/USD at key resistance levels prior to the U.S FOMC Meeting Minute release.
The GBP/USD can easily be crowned as one of 2018's star performer; the pair is seen to have recouped much of it's post-Brexit losses, as indicated in the strong uptrend visible in the chart below. Nonetheless, the pair has continued to trend lower for the start of this week. In the recent Bank of England (BoE) Interest Rate Decision meet up, the committee warned that the BoE akin to the U.S, may also raise interest rates faster than expected. This statement sparks some optimism for GBP/USD prices to move further upwards. This week in particular, markets will be scrutinizing the country's Gross Domestic Poduct (GDP) and Inflation related data releases to obtain better directional cues.
The USD/CAD in regards to the chart below shows some pattern of a Wcykoff triggered sell-down. The team here at FintechFX note that the Dow Theory's 50% level is showing good resistance further supporting views of a continuation of a downtrend. The validity of this view will be determined by the U.S FOMC Meeting Minute release (due midweek) coupled with the Canadian Consumer Price Index (CPI) data due towards the end of the week.
Source (Charts): https://www.investing.com
Source (Economic Calendar): https://www.forexfactory.com/calendar.php
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