Forex Traders Square Positions as Fed Begins Talks

The Dollar is expected to give back some of its gains today as investors square up positions following a three day surge.

The Dollar is expected to give back some of its gains today as investors square up positions following a three day surge.

The Fed begins its two-day meeting today to discuss interest rates and its quantitative easing program. Traders expect the Fed to leave interest rates unchanged and to allow its quantitative easing program to end in September.

The main job of the Fed at this time is to maintain investor optimism without allowing investors to get overly speculative about the speed of a U.S. economic recovery. It will have to choose carefully its language so that it doesn’t curtail any economic growth the economy is enjoying currently.

The GBP USD is expected to see a profit-taking rally today following a three-day setback. The fundamentals as well as the technical pattern remain bearish.

Look for profit-taking and short-covering to help boost the Euro today. Bearish sentiment is growing which could mean this market will set up a selling opportunity later this week.

Choppy trading in the equity markets could trigger a two-sided trade in the USD CAD today. Overall, the main trend remains up. Once this Fed meeting is over tomorrow, look for the Dollar to continue its dominance over the Japanese Yen.

Profit-taking is expected to pressure the USD CAD. The strengthening U.S. economy is expected to maintain a bullish tone for the U.S. Dollar over the Canadian Dollar.

Demand for higher yielding assets seems to be diminishing which will either pressure or limit gains in the AUD USD and NZD USD.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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