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Daily Financial Market News

Wed, 20 Sep 2017 14:30:00 GMT

Federal Reserve Interest Rate Forecast to Sway EUR/USD Outlook

Federal Reserve Interest Rate Forecast to Sway EUR/USD Outlook Menu    Search DailyFX Home   Rates   Charts Market News        Real-Time News Daily Briefings Forecast Market Alerts DailyFX Authors Articles Technical Analysis        Analyst Picks Support & Resistance Daily Technical Reports Pivot Points Sentiment Articles Algorithmic Trading Calendars        Economic Calendar Webinar Calendar Central Bank Rates Dividend Calendar Education Beginner Intermediate Advanced Expert Free Trading Guides DAILYFX PLUS Toggle navigation News News   Market News Real-Time News Daily Briefings Forecast Market Alerts DailyFX Authors Articles Market News Headlines Strong Canada Consumer Price Index (CPI) to Cap USD/CAD Rebound Bitcoin Prices Under Pressure- Time to Buy? AUD/USD Range Snaps Following FOMC; RBA Tames Bets for 2017 Rate Hike Technical  Analysis Analysis   Technical Analysis Analyst Picks Support & Resistance Daily Technical Reports Pivot Points Sentiment Articles Algorithmic Trading Technical Analysis Headlines Japanese Yen Technical Analysis: Year’s Lows Creep Back Into Focus GBP/USD Approaches Important Long Term Price Zone S&P 500 Bulls Undeterred by Hawkish Fed; Eyes on Slope Resistance Calendars Calendar   Economic Calendar Webinars Calendar Central Bank Rates Dividend Calendar Forex Economic Calendar Time Event Actual Forecast Rates   Charts   Education Edu   Education Beginner Intermediate Advanced Expert Free Trading Guides DAILYFX PLUS DFX+    Search × Get the best parts of DailyFX.com in the new DailyFX App Download × Join Us For Our Free Webinars Get daily market analysis from our in-house experts Choose from more than 25 webinars each week Put your questions to our experts in real-time Q&As Register now Want to hold off on improving your trading? Click here to dismiss. × Get Your Free Trading Guides With your broad range of free expert guides, you'll explore: The basics of forex trading and how to develop your startegy Foundational knowledge to help you develop an edge in the market What's ahead for major FX pairs, Gold, Oil and more Download a Free Guide Want to hold off on improving your trading? Click here to dismiss. EUR/USD EUR/USD Low ------ High ------ View More Note: Low and High figures are for the trading day. News Post FOMC, BoJ Price Action Setups (Sept. 21, 2017) EUR/USD Steady as Draghi Avoids Mention of Monetary Policy FOMC-Fueled USD Runs into Resistance: GBP/USD, EUR/USD Primed GBP/USD GBP/USD Low ------ High ------ View More Note: Low and High figures are for the trading day. News GBP Coiled Ahead of Make-or-Break Brexit Speech SPX Wavers but Holds, VIX Below 10, Pound Ready for Volatility It’s Prime Minister May’s Turn to Charge or Sink GBP/USD USD/JPY USD/JPY Low ------ High ------ View More Note: Low and High figures are for the trading day. News Japanese Yen Technical Analysis: Year’s Lows Creep Back Into Focus USD/JPY Trend: Is This a Long Term Bottom? Post FOMC, BoJ Price Action Setups (Sept. 21, 2017) Gold Gold Low ------ High ------ View More Note: Low and High figures are for the trading day. News DailyFX Morning Digest: US Dollar Getting Much Needed Lift from FOMC US Dollar Bottoming Process May Finally Be Starting Crude Oil Price Hit 4-Month High, Gold Drops on FOMC Outcome Oil Oil Low ------ High ------ View More Note: Low and High figures are for the trading day. News Crude Oil Price Hit 4-Month High, Gold Drops on FOMC Outcome Gold Price Drop May Resume on Steady FOMC Policy Outlook Crude Oil Prices Remain Bid as Iraq Hints at More OPEC Measures BITCOIN BITCOIN Low ------ High ------ View More Note: Low and High figures are for the trading day. News Bitcoin Prices Under Pressure- Time to Buy? Near-term Setups in EUR/USD, Bitcoin & Ethereum Pound Surges, Bitcoin Plummets Ahead of Pivotal FOMC Meeting View More   More Real-Time News Facebook Twitter Youtube Google + Federal Reserve Interest Rate Forecast to Sway EUR/USD Outlook by  David Song, Currency Analyst  Central bank policy, economic indicators, and market events. Connect via: - Federal Open Market Committee (FOMC) to Keep Interest Rate on Hold. - Will Chair Yellen & Co. Start to Unload the Balance Sheet? - Sign Up and Join DailyFX Chief Strategist John Kicklighter LIVE to Cover the FOMC Rate Decision. Trading the News : Federal Open Market Committee (FOMC) Interest Rate Decision The Federal Open Market Committee (FOMC) is widely anticipated to keep the benchmark interest rate on hold in September, but the fresh forecasts from Chair Janet Yellen and Co. may heavily influence the near-term outlook for the dollar as market participants gauge the timing of the next rate-hike. Even though Fed Fund Futures highlight a 50/50 chance for a move in December, the FOMC may stay on course to deliver three rate-hikes in 2017 as ‘d ata received over the intermeeting period reinforced earlier indications that real GDP growth had turned up after having been slow in the first quarter of this year.’ As a result, a hawkish statement may trigger a bullish reaction in the greenback especially as the ‘ Committee expects to begin implementing its balance sheet normalization program relatively soon .’ However, the Fed may soften its hawkish tone as many officials ‘ saw some likelihood that inflation might remain below 2 percent for longer than they currently expected, ’ and the U.S. dollar may face a more bearish fate if Chair Yellen and Co. forecast a more shallow path for the longer-run interest rate. Impact that the FOMC interest rate decision has had on EUR /USD during the last meeting Period Data Released Estimate Actual Pips Change (1 Hour post event ) Pips Change (End of Day post event) JUL 2017 07/26/2017 18:00:00 GMT 1.00% to 1.25% 1.00% 1.25% +94 +89 July 2017 Federal Open Market Committee (FOMC) Interest Rate Decision EUR/USD 10-Minute Chart The Federal Open Market Committee (FOMC) voted unanimously to keep the benchmark interest rate at its current range between 1.00% to 1.25%, with the central bank noting ‘o n a 12-month basis, overall inflation and the measure excluding food and energy prices have declined a nd are running below 2 percent.’ Even though the ‘ Committee expects to begin implementing its balance sheet normalization program relatively soon, ’ it seems as though the Fed is in no rush to implement higher borrowing-costs as ‘m arket-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance. ’ The greenback lost ground following the cautious remarks, with EUR/USD climbing above the 1.1700 handle to end the day at 1.1734. How To Trade This Event Risk ( Video ) Bullish USD Trade: FOMC Stays on Course to Further Normalize Policy in 2017 Need a red, five-minute candle following the rate decision to consider a short EUR/USD trade. If the market reaction favors a bullish dollar position, sell EUR/USD with two separate lots. Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward. Move stop to breakeven on remaining position once initial target is met, set reasonable limit. Bearish USD Trade: Fed Attempts to Buy Time, Endorses Wait-and-See Approach Need a green, five-minute EUR/USD candle to consider a short dollar trade. Implement the same approach as the bullish dollar position, just in the opposite direction. Potential Price Targets For The Release EUR/USD Daily Chart Check out our EUR/USD quarterly projections in our F REE DailyFX Trading Forecasts EUR/USD appears to be on track to extend the advance from earlier this week as it carves a fresh series of higher highs & lows, but the Relative Strength Index (RSI) continue to deviate from price; need to see the momentum indicator clear the bearish formation carried over from August to favor a further advance in the exchange rate. Will retain a constructive outlook for EUR/USD as long as the pair holds above the 1.1770 (100% expansion) zone, with a break of the monthly-high (1.2092) raising the risk for a more meaningful run at the 1.2130 (50% retracement) hurdle, with the next topside target coming in around 1.2230 (50% retracement). However, a near-term correction in EUR/USD may spur a move back towards 1.1670 (50% retracement), which lines up with the August-low (1.1662) , with the next downside region of interest coming in around 1.1580 (100% expansion) . Interim Resistance: 1.2320 (23.6% retracement) to 1.2370 (61.8% expansion) Interim Support: 1.1390 (61.8% retracement) to 1.1400 (61.8% expansion) --- Written by David Song, Currency Analyst To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong. To be added to David's e-mail distribution list, please follow this link DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. DISCLOSURES Related Articles Previous Articles From trading news reports Related Prev Articles   Strong Canada Consumer Price Index (CPI) to Cap USD/CAD Rebound   Bitcoin Prices Under Pressure- Time to Buy?   AUD/USD Range Snaps Following FOMC; RBA Tames Bets for 2017 Rate Hike   FOMC-Fueled USD Runs into Resistance: GBP/USD, EUR/USD Primed   US Dollar Bottoming Process May Finally Be Starting   GBP/USD Vulnerable to Further Losses on 7 to 2 BoE Split   Upbeat Australia Employment Report to Generate AUD/USD Rebound   GBP/USD Risks Larger Advance Ahead of BoE on Strong U.K. CPI Report   USD/CAD: Post-BoC Losses to Accelerate on Strong Canada Employment   EUR/USD Outlook Hinges on Updated ECB Forecast, QE Program Deadline Advertisement Upcoming Events Economic Event Importance Actual - Forecast - Previous Importance Actual - Forecast - Previous Forex Economic Calendar A:  Actual   F:  Forecast     P:  Previous

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