USD flies, indices fall on Powell’s forecast – Forex trading long GBP/USD [Video]

Brad Alexander FX Large Limited

The US Federal Reserve lowered Interest Rates as predicted, but inflation is still an issue.

Look what happened.

After the cut, Jerome Powell announced that the Fed may slow down rate cuts in 2025 driving US indices much lower.

So, should we buy back in?

This move affected all global stock indices and the good news is that the Nikkei is recovering.

It opened lower this morning but filled the gap quite quickly.

This may signal recoveries in the rest of the world.

The FTSE 100 in London fell as well but this may not be a sensible long trade as price action is in a downtrend and GBP is strong against all currencies except USD.

If we look at the US Indices we have some good candidates for long trades as we see the stochastic oscillator oversold and turning up on the S&P500 and the NASDAQ.

We also saw USD pairs move on a much stronger USD.

The big move in USD also affected Gold as price action broke out of its range.

It rebounded quite quickly and it is back to a key level so we will need to see where it wants to go from here.

As most USD pairs were already moving in favour of the greenback, we only see a reversal possibility on GBPUSD.

On the 4-hour chart, we see the stochastic oscillator looking very oversold after the big fall.

For you Fibonacci fans, we see that price action bounced off a key level and is now at the 61.8% level.

Let’s see if GBP buyers and/or USD sellers can push it higher.

Speaking of GBP, let’s see if today’s Interest Rate decision, where we expect no change, causes volatility.

Author

Brad Alexander

FX Large Limited

Brad became fascinated with the Currency Markets from a young age and researched fundamental analysis.

GBP/USD stays offered near 1.3370

GBP/USD remains on the back foot, slipping back toward the 1.3370 zone on Tuesday. Cable has come under pressure soon after testing the 1.3400 neighbourhood as investors turned more cautious in response to renewed effervescence on the geopolitical front.

EUR/USD stays offered below 1.1450

EUR/USD remains on the back foot ahead of the opening bell in Asia, returning to the low-1.1400s on the back of the resurgence of the demand for the US Dollar. Indeed, renewed jitters in the Middle East support the safe haven universe and weigh on the sentiment surrounding the risk complex. Moving forward, investors’ attention should shift to Wednesday’s FOMC Minutes.

Gold consolidates near $4,100; looks to FOMC Minutes amid Iran tensions

Gold steadies around $4,100 following the previous day's downfall as traders opt to wait for the release of FOMC Minutes, due later this Wednesday. The outlook will influence the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion. In the meantime, fresh US strikes on Iran lift Oil prices to a two-week top, reviving inflation fears and supporting the safe-haven buck. This should cap the upside for the precious metal.

RBNZ set to increase interest rate after three pauses amid deeply divided committee

The Reserve Bank of New Zealand is widely expected to raise the Official Cash Rate by 25 basis points from 2.25% to 2.50% on Wednesday, snapping a three-consecutive-meeting pause.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance, arguing that the current world demands more flexibility.