FOMC Up Next
The FOMC meeting later today holds the potential to be a key, near-term catalyst for FX price action. With traders expecting the Fed to hike rates by .5%, the focus now will be one the accompanying guidance issued alongside the rate decision. Should the Fed maintain its recent hawkishness, focusing on the need to normalise policy so as to battle inflation, USD is likely to remain supported near term. However, should we see any moderation in the tone of the Fed’s assessment, particularly in light of the Q1 GDP miss, this will likely weigh on USD in coming sessions.
Where to Trade the May FOMC Meeting?
The recent move lower in Gold can be seen as a corrective leg against the longer-term bull trend. Price is currently hovering around support at the 1871.04 level, with firmer support below around the bull channel bottom and the 1826.71 level. While this area holds as support, the focus remains on an eventual continuation higher. Bulls can look for a move through 1919.92 as confirmation, targeting 1958.82 initially and 2014.32 there above.