FOMC Minutes: Good stuff, but nothing markets didn’t already assume

The FOMC Minutes showed the markets what many investors have already known, in particular:

Many Fed officials said 1 or more 50bps hikes may be warranted
FOMC backs roll off cap phase-in of 3 months or modestly longer
$95 billion month cap for asset runoff likely appropriate (markets were looking for $80-$100 billion)

However, this seems to be old news as Fed member after Fed member has been more “hawkish leaning” since the March 16^th meeting. Fed Chairman Powell spoke in mid-March and said that “if the Fed needs to tighten above neutral rate, it will do so.” In addition, when asked what would prevent a 50bps hike at the May meeting, Powell replied “nothing!”. Yesterday, the Fed’s Brainard said that the “Fed is prepared to take strong action if inflation and inflation expectation indicators suggest a need for such action”. Regarding the balance sheet, she indicated that the Fed could begin to reduce at a “rapid” pace. In addition, the Fed’s George said that a 50bps hike is an option we have to consider. Today, the Fed’s Harker and Barkin echoed these same sentiments.

Everything you need to know about the Federal Reserve

The DXY continued its assault higher towards the 100 level. First resistance is at the 127.2% Fibonacci extension from the high of March 7^th to the lows of March 30^th, at 99.89. If price can trade above there, the next resistance level is psychological round number resistance level at 100.00, then the 161.8% Fibonacci extension from the same recently mentioned timeframe at 100.49. First support is at today’s low near 99.31, then the top, upward sloping trendline of the long-term channel near 99.00. Below there, the DXY can fall to horizontal support at 98.43.

Source: Tradingview, Stone X

Trade DXY now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

GBP/USD has been moving lower aggressively lower since making a near-term high on January 13^th at 1.3788. On March 14^th, the pair tested the 127.2% Fibonacci extension from the lows of December 8^th, 2021 to the highs of January 13^th, near 1.3000. Price failed to break below and bounced to resistance near 1.3273. GBP/USD is now moving lower and appears to be trying to test the 1.3000 level once again. If price breaks below, horizontal support from November 2020 is at 1.2854, then the 161.8% Fibonacci extension from the same timeframe near 1.2793. Resistance is at the March 23^rd highs of 1.3298, then horizontal resistance at 1.3486.

Source: Tradingview, Stone X

Trade GBP/USD now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

The Minutes from the March 16^th FOMC meeting had some good information, however they were a bit stale, as almost all Fed speakers have been hawkish lately. However, the DXY did continue its move towards 100.00 and GBP/USD tried to get near 1.3000. If the hawkish signals continue from Fed officials, prices may reach those levels soon.

Learn more about forex trading opportunities.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.