FXStreet send me a survey about the upcoming FOMC event, what I expect to happen and how the markets will react. In response to that, being a trader and not an analyst, here's what I think you should be aware of regarding such an event and how to approach it.
I think that if you don't have a specific plan for FOMC days, it's best to stay out of the markets. Especially if you're a day trader, for two reasons. First of all before the statement the markets are quite thin and usually there's not a lot of movement. Bad conditions to day trade as we need liquidity and movement to be successful as day traders. Now when the statement is actually released, volatility usually explodes with prices moving very fast while liquidity is very low. This often results in significant slippage when your orders get executed. This again are conditions not favorable for day trading.
The exception here is if you know what you're doing. This means you did your homework, looked at all kinds of statistics of what happens on FOMC days in the market you're trading. You know what kind of moves/volatility is likely to expect, what kind of orders to use to enter/exit trades and what position size will work for you in such a fast market. You also know where you can trade under such conditions, you don't want to trade at a broker that is likely to widen the spread by a crazy amount or whose platform might go down. In other words, you have a specific plan to execute that provides you an edge on FOMC days. If you don't have that, again just stay out and come back on the next trading day when the markets are back to normal.
If you're trading longer-term and have positions on, I suggest to make sure your stops, if you're using fixed stop-loss orders, are far enough away from prices to not get triggered by some knee-jerk reaction from the markets. On such days it actually often is a good idea to cancel any stop-orders and put them back after the event. But that's something every trader should test themselves depending on their strategies.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
Editors’ Picks
EUR/USD shifts its attention to 1.1900 and above
EUR/USD has shaken off Tuesday’s dip, pushing back beyond the 1.1800 mark amid decent gains as Wednesday’s session draws to a close. The rebound is largely driven by a modest pullback in the US Dollar, as markets digest the aftermath of President Trump’s SOTU speech and continue to monitor trade-related headlines and signals from the White House.
GBP/USD challenges multi-day highs near 1.3530
GBP/USD leaves behind the previous day’s decline and regains fresh upside traction on Wednesday, surpassing the 1.3500 barrier in a context of a modest decline in the Greenback and a generalised improved mood in the risk-linked space. Meanwhile, the US tariff narrative continues to dictate the mood among market participants after Presidet Trump’s SOTU speech failed to surprise markets.
USD/JPY Price Forecast: Bulls await move beyond 156.00 amid constructive technical setup
USD/JPY attracts some dip-buyers on Wednesday and seems poised to appreciate further. Delayed BoJ rate cut bets undermine the JPY and offset a weaker USD, supporting the pair. The technical setup also favors bullish traders and backs the case for further appreciation.
Editors’ Picks
AUD/USD looks well bid, retargets 0.7150
AUD/USD adds to Tuesday’s advance and clock strong gains past the 0.7100 hurdle ahead of the opening bell in Asia. Hotter-than-expected Australian inflation data in combination with the RBA’s hawkish stance continue to underpin the move higher in the pair.
EUR/USD shifts its attention to 1.1900 and above
EUR/USD has shaken off Tuesday’s dip, pushing back beyond the 1.1800 mark amid decent gains as Wednesday’s session draws to a close. The rebound is largely driven by a modest pullback in the US Dollar, as markets digest the aftermath of President Trump’s SOTU speech and continue to monitor trade-related headlines and signals from the White House.
Gold remains bid and close to $5,200
Gold buyers are returning to the fold on Wednesday, targeting the $5,200 area and possibly beyond, after Tuesday’s corrective dip from monthly highs. The rebound in the precious metal comes as the US Dollar loses traction, with Trump’s SOTU speech offering little fresh direction and AI-related nerves continuing to ease.
UK financial watchdog advances stablecoin oversight as four firms pilot issuance
The Financial Conduct Authority (FCA) in the United Kingdom (UK) is advancing toward the final stablecoin regulatory framework with a pilot program involving four companies, including Monee, Financial Technologies ReStabilise, Revolut and VVTX.
Nvidia earnings to influence AI trade and broader market sentiment Premium
For the last three years, Nvidia has been the engine of the AI boom, and now Wall Street is watching to see whether that momentum can keep going. High-growth stocks have been struggling to maintain their bullish trend in 2026.
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