EURUSD market trade cautiously ahead of the FedThe Federal Reserve decision is the main event today and is likely to dominate market direction. Before the decision, US August retail sales will be closely watched for signs of consumer strength, while the NAHB housing index and New York Fed services activity will provide further clues on the health of the US economy.
Import and export price data will also attract attention as markets assess inflation pressures. Stronger-than-expected US data could support Treasury yields and the dollar by reducing expectations for easier monetary policy.
The Fed decision will be the key catalyst. With the rate move largely anticipated, attention will focus on the accompanying statement, economic projections and the tone of the press conference. Any indication of a more restrictive policy stance could strengthen the dollar, while a more cautious outlook could trigger USD weakness.
UK inflation figures, including CPI, PPI and RPI, will drive sterling volatility. Japan’s trade balance and machinery orders may influence the yen, while Eurozone industrial production and ECB commentary will provide additional direction for EUR/USD.
The European Commission President’s State of the Union address could also generate some movement in the euro, particularly through comments on European economic policy, trade and geopolitical issues.
Conclusion: The market is likely to trade cautiously ahead of the Fed, with US retail sales and Treasury yields providing the main pre-Fed signals. After the decision, the dollar’s direction should depend primarily on the Fed’s guidance on future interest rates rather than the rate decision itself.
Key Support and Resistance Levels
Resistance Level 1: 1.1607
Resistance Level 2: 1.1650
Resistance Level 3: 1.1695
Support Level 1: 1.1500
Support Level 2: 1.1480
Support Level 3: 1.1450
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. To the extent permitted by law, in no event shall Trade Nation (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk. Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.
Financial Spread Bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Short
