Investors Lock Gaze on FOMC

WILL THE FED DISCUSS A QE TAPERING AT TODAY’S GATHERING?

The US dollar traded higher against most of the other major currencies on Tuesday and during the Asian session Wednesday. It gained versus CAD, AUD, NZD, and GBP in that order, while it underperformed slightly against CHF, JPY and EUR.

NASDAQ 100 — TECHNICAL OUTLOOK

Yesterday, after hitting a new all-time high, at around 14161, the Nasdaq 100 cash index corrected lower and is now trading near a 21 EMA on our 4-hour chart. Even if the price moves a bit further south, we may class this move as a temporary correction, before another possible leg of buying, if the short-term tentative upside support line, drawn from the low of June 4th, remains intact. We will stay bullish overall.

USD/CHF — TECHNICAL OUTLOOK

Although USD/CHF recovered some of its losses at the end of last week, it has been flat since the beginning of this week. At the same time, the pair continues to trade below a short-term tentative downside resistance line taken from the high of May 5th. As long as the rate remains below that downside line, the near-term outlook may stay bearish.

AS FOR THE REST OF TODAY’S EVENTS

During the early European session, we already got the UK CPIs for May. Both the headline and core rates rose by more than anticipated, but the pound added only around 10 pips against its US counterpart after the release. This confirms our view that accelerating inflation is unlikely to spark speculation for more action by the BoE at its upcoming gathering. In our view, GBP-traders are likely to stay focused on the coronavirus saga, and the rising cases in the UK due to the Delta variant, which prompted PM Johnson to delay the reopening of the economy by a month.

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JFD is a leading Group of Companies offering financial and investment services and activities.