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.
Weak USD, Gold and China's Stocks Recover
- The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes and said that although the US economy is making progress, it’s not enough to taper yet. As a result, the USD weakened and EUR/USD rocketed.
- China’s government eased its pressure on the country’s companies and allowed local firms to go public in the US. The Hang Seng Index (HK50) surged after that report!
- Biden’s $1 trillion infrastructure plan was approved by the Senate. It is good news for electric vehicles producers such as Tesla, Ford, and General Motors as $7.5 billion will be spent on electric vehicle charging stations.
- Oil surged due to the declining crude oil inventories as it showed the increasing oil demand. Bitcoin is moving sideways around $40,000, holding this week’s recovery.
- Facebook reported better-than-expected earnings results for the second quarter. However, it cautioned investors with a risk of slower growth because of Apple’s advertising regulatory changes. Pfizer rocketed after strong earnings data. PayPal posted mixed results but still closed in green.
EUR/USD has broken above the upper trend line after the Fed’s dovish comment. The pair is getting closer to the 23.6% Fibonacci retracement level of 1.1870. The pair is likely to struggle to cross this resistance level. Be ready for the reverse down! Support levels are at the recent lows of 1.1835 and 1.1810. On the flip side, if the pair manages to cross 1.1870, it may rocket to the psychological mark of 1.1900.
A similar situation has occurred on the gold chart. XAU/USD has closed above the 38.2% Fibonacci retracement level of $1855. Thus, there is a high probability that the price will rise further and reach the 50% Fibo level of $1833. Support levels are the psychological mark of $1800 and the 23.6% Fibo level of $1795.
The Canadian dollar gained from the rising oil prices. As a result, USD/CAD dropped. The pair is getting closer to the 1.2450 support level. If it manages to cross it, USD/CAD may fall to the low of July 30 at 1.2380. Resistance levels are the recent highs of 1.2600 and 1.2750.
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).