Crude Oil Falls on Inventory Rise

The U.S. Dollar is trading better against most major currencies at the midsession ahead of this afternoon’s Fed FOMC announcement.

The U.S. Dollar is trading better against most major currencies at the midsession ahead of this afternoon’s Fed FOMC announcement. Traders are certain the Fed will leave interest rates at near historically low levels but are unsure what language it will use to announce its future plans. Bullish foreign currency traders want to hear the Fed will leave interest rates low for an extended period of time.

Traders also want to hear the Fed say it will extend its stimulus program to buyback mortgages until the end of the year. The Fed is walking a tightrope. If they pull the stimulus too early it may curtail the start of the recovery. The market doesn’t want to see the stimulus expanded as this would indicate the economic situation is not improving. It doesn’t want to see the Fed pull the stimulus too early either.

Most traders don’t expect the Fed to speak directly about the Dollar, but any hint that rates may rise in the near future is likely to trigger a strong short-covering rally.

The GBP USD is posting a gain because of friendly comments from the Bank of England in its minutes report.

Lower demand for higher risk assets is boosting the EUR USD and Japanese Yen. Weaker crude oil is pressuring the Canadian Dollar. Australian Dollar and New Zealand Dollar bulls are waiting to see what the Fed does with its stimulus plans. Any announcement which could indirectly boost interest rates could put pressure on the higher yielding 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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