FOMC Up Next
The FOMC meeting later today has plenty of two-way risk around it. On the one hand, should the Fed follow through and deliver on hawkish expectations, USD will be comfortably stronger on the back of the meeting and into the end of the year. On the other hand, if he Fed undershoots these hawkish expectations, there is plenty of room for an upset and USD to trade lower, creating a wave of opportunity across the markets. Plenty of FX pairs look set to pop should USD sell-off from today’s meeting (EURUSD,GBPUSD I’m looking at you). However, if today’s meeting is decidedly hawkish (Fed increases tapering, hawkish outlook, economic forecasts and dot plot revised higher) then USD is likely to see lift off, creating short opportunities elsewhere.
Where to Trade The FOMC?
Gold
The gold market is once of the key candidates for a breakdown if we see a firmly hawkish FOMC today. A rally in USD will weigh heavily on gold. Currently, price is sitting in a block of consolidation at the foot of the recent decline. Having tested below the rising trend line from August lows though still sitting atop 1763.88 for now, a USD rally today would likely see gold breaking below that level opening the way for a move down to test the 1700 handle next, with a rest of the broken bear channel top coming in just ahead of that.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.