That day has come, guys! The Fed will hold a meeting at 21:00 GMT+3. It can be a highly impactful event. The markets expect the bank to hint about the timing of tapering.
US Dollar Takes Breath, UK Showed Poor Sales
- The US dollar takes a breath after a long rally. Its recent jump was caused by the Fed’s Meeting Minutes (the detailed record of the last meeting). After watching this record, investors have become more confident that the Fed can taper soon.
What is tapering? It is a process of cutting bond buys or increasing interest rates by the central bank. It is positive for the national currency, that’s why tapering tends to push the currency up. Traders also say ‘the central bank made a hawkish decision’ in this case. By the way, we have a glossary with the key trading terms. ‘Hawkish’ is one of them, check it out!
- The UK retail sales came out much worse than analysts expected. Sales dropped by -2.5%, while the forecast was 0.2%. It is a negative factor for the British pound. As a result, EUR/GBP surged above 0.8570, clearing the way up to 0.8600.
- Meanwhile, Bitcoin keeps attacking the resistance level of $47,700. The breakout may happen today or on weekend. Keep an eye as it will open the doors to the psychological mark of $50,000.
- Oil has stopped falling but their recent drop has signaled a warning about the impact of Covid-19’s resurgence on the global recovery.
Gold is moving sideways between the 38.2% Fibonacci retracement level of $1775 and the 50-day moving average of $1795. Traders await eagerly the breakout. if gold crosses the resistance zone of $1795-1800, the way up to the 200-day moving average of $1815 will be open. On the flip side, the move below the $1775 support level will press the yellow metal further down to the next round number of $1760.
USD/JPY keeps moving inside the ascending channel. Now, the pair is stuck between two moving averages: 50- and 100-day. The USD weakened today after a long rally, so we might expect USD/JPY to break below the 109.60 support. If it happens, the pair will fall to the recent lows of 109.20. In the opposite scenario, the breakout above the 50-day MA (the red line) of 110.20 will open the doors to the early August highs of 110.60.
A selloff in stocks stopped. S&P 500 has reversed up from the 100-day moving average. It should be the perfect time to buy the index.
The FOMC, a committee within the Federal Reserve, will hold an important meeting and press conference on September 22 at 21:00 MT time (GMT+3).
Germany, the leading economy in the Euro Zone, will reveal one of the key economic indicators – German Ifo Business Climate on September 24 at 11:00 MT time.
On Wednesday, September 22, Microsoft will be holding a product launch. The event starts at 18:00 GTM + 3.
The Bank of England will hold a meeting on Thursday at 14:00 MT time (GMT+3).