Caution Over U.S. Dollar Movements Following the FOMC Meeting?
23.09.2021
- U.S. Leading Economic Index
- U.S. Initial Unemployment Insurance Claims
The previous day, the U.S. Federal Open Market Committee (FOMC) kept the policy interest rate unchanged at 0–0.25%. Following Federal Reserve Chair Powell’s remarks that “tapering could begin as early as November of this year,” the VIX (fear index) fell by about 15% and settled around 20.8.As a result, the USD/JPY pair rose to 109.9. The market has shifted away from the risk-off sentiment that prevailed until the previous day and is now back in 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; 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 the pair trading within a range.
Today, at 4:15 p.m., the French Manufacturing/Services PMI will be released; at 4:30 p.m., the German Manufacturing/Services PMI;Switzerland’s policy rate and statement at 4:30 PM, the Eurozone Manufacturing and Services PMIs and the ECB’s Monthly Report at 5:00 PM, the UK Manufacturing and Services PMIs at 5:30 PM, the UK’s policy rate and statement at 8:00 PM, Turkey’s TCMB policy rate and statement at 8:00 PM, Canada’s retail sales at 9:30 PM,U.S. Initial Jobless Claims, U.S. Manufacturing/Services PMI at 10:45 p.m., U.S. Leading Economic Index at 11:00 p.m., and U.S. Weekly Natural Gas Inventories at 11:30 p.m. Since the Manufacturing/Services PMIs for each country are preliminary figures, investors should be on the lookout for significant price movements.
Author: Keisuke Sakurai
