Market participants may be on guard regarding the U.S. dollar’s movements following the FOMC meeting
23.09.2021
- U.S. Leading Economic Index
- U.S. Initial Jobless Claims
The previous day, the Federal Open Market Committee (FOMC) kept the federal funds rate unchanged at 0–0.25%. Following remarks by Fed Chair Powell that “tapering could begin as early as November,” the VIX (fear index) fell by approximately 15% and settled around 20.8. As a result, the USD/JPY exchange rate rose to 109.9.The market has shifted away from the risk-off sentiment that prevailed until the previous day, returning to a risk-on mood characterized by rising stock prices and a stronger dollar.
From a technical perspective, if USD/JPY breaks above the immediate resistance level at 110.01, it is likely to rise further toward 110.20; conversely, if it breaks below the immediate support level at 109.17, it is likely to head toward 108.75, which is near the daily 200-day moving average. However, given that the support level at 109.00 has held firm since last month, we should also consider the possibility of a range-bound movement.
Today, at 4:15 PM, France’s Manufacturing/Services PMI; at 4:30 PM, Germany’s Manufacturing/Services PMI and Switzerland’s policy rate and statement; at 5:00 PM, the Eurozone’s Manufacturing/Services PMI and the ECB’s monthly report; at 5:30 PM, the UK’s Manufacturing/Services PMI; at 8:00 PM, the UK’s policy rate and statement;Turkey’s TCMB policy rate and statement, at 9:30 PM Canadian retail sales and U.S. initial jobless claims, at 10:45 PM U.S. Manufacturing/Services PMI, at 11:00 PM U.S. Leading Economic Index, and at 11:30 PM U.S. weekly natural gas inventories are scheduled for release. In particular, since the Manufacturing/Services PMIs for each country are preliminary figures, investors should be on alert for significant price movements.
Author: Keisuke Sakurai
