Head of FX Strategy
Summary: The Fed, the dollar, EURSEK, and EURCHF in focus.
Most of today’s developments, like CHF and SEK weakness, and JPY weakness to a degree as well, are extensions of prior developments we have noted this week and late last week. It’s important to reserve judgment on the latest move until we see the post-Federal Open Market Committee action this evening, as this is an event with significant impact to change the narrative across markets, particularly if the Federal Reserve dramatically disappoints anticipation of a more dovish shift in forward guidance on its balance sheet reduction, or QT, programme.
Today’s FX Breakout monitor
Page 1: EURJPY continues to toy with resistance, but JPY is likely one of the more sensitive currencies to the FOMC meeting tonight – let’s see where we close the day. Elsewhere, EURCHF bulled through the key 1.1350 break area yesterday and extended today.
The USD outlook is potentially pivotal today as well for pairs like NZDUSD, AUDUSD and USDCAD, all of which could post new breakouts on a daily close basis today if the USD is sold over the FOMC meeting – these pairs certainly look like stand or fall situations for the USD.
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