Daily FX Trading Update: FOMC Statement to Determine USD Trend – Oct 29, 2014

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Daily FX Trading Update: FOMC Statement to Determine USD Trend - Oct 29, 2014

The US dollar gave up ground to most of its major FX trading counterparts, with the exception of the Japanese yen, in yesterday’s trading sessions. Durable goods orders data came in below expectations, with the headline figure showing a 1.3% decline and the core figure showing a 0.2% drop. Analysts expected a 0.4% and 0.5% gain respectively. The big mover for the US dollar today would be the FOMC statement, during which the Fed might give hints on when they could start hiking interest rates. Dovish remarks similar to their previous statement could drive the dollar lower.

The euro made a bit of recovery to the dollar and yen as German import prices came in stronger than expected and posted a 0.3% uptick. There are no major releases from the euro zone today, leaving euro pairs sensitive to risk sentiment and the upcoming FOMC decision.

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The pound edged higher in recent FX trading sessions, despite the lack of top-tier data from the UK. For today, net lending to individuals and mortgage approvals data are due, which might lead to small pound moves across the charts. Risk sentiment and the FOMC statement might be more influential to pound price action today, as the announcement could affect market risk sentiment.

The franc continued to advance to the dollar in recent FX trading, as the Swiss currency was lifted by improving German import prices, easing deflationary concerns in the continent. There are still no reports up for release from Switzerland today, leaving franc pairs vulnerable to risk sentiment.

The yen continued to lose FX trading ground, weighed down by remarks from BOJ Kuroda saying that the economy might see weaker inflationary pressures and that the central bank might need to implement more stimulus. Data from Japan has actually been stronger than expected, as retail sales and preliminary industrial production both beat expectations.

The comdolls showed more strength in recent FX trading, as AUDUSD made an upside break from consolidation while USDCAD showed more downside momentum. There have been no major releases from Australia, New Zealand, and Canada so far this week but it appears that improvements in risk appetite are starting to lift the higher-yielding currencies. The RBNZ statement is coming up and more remarks on the overvalued Kiwi could spark fears of intervention and drive the currency lower.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.