The dollar: the fed Meeting, the main topic of the day
Today on the agenda of the markets, the upcoming fed meeting: an event that has the greatest potential impact on the markets.
News background is the following: the US GDP showed growth acceleration to 3.2%, mainly due to the accumulation of stocks; trade deal with China is still not concluded, and the housing market is clearly stumbles on the path of growth. All the arguments in favour of maintaining the pause in monetary policy, which is the expected scenario at the end of the meeting.
Less obvious developments can cause more severe and unpredictable reactions of traders. Just remember that the soft rhetoric of the fed helped U.S. indexes add more than 20% since the end of last year, and therefore may spur further growth at this time. At the same time, it will be bad news for the dollar, which last week climbed to 2-year highs.
Unlikely, but still can not completely exclude that the fed will try to cool the markets, noting that the U.S. economy maintains a healthy growth rate, and that in the coming months is to consider further rate hikes. In this case, stock markets run the risk of receiving a severe blow and the dollar is pulling back sharply to growth.
The stock market
Strong report helped the key us indexes to get back on the offensive and to update the historical highs for S&P500 and Nasdaq. Data on manufacturing activity and the labor market from ADP could affect this trend. The most dangerous, the sudden increase of alertness of market participants as the original desire to fix the position of the risks turn into a serious correction.
Europe was surprised by the strong data on Tuesday, which caused a sharp increase in purchases of the single currency. In recent days the EURUSD rose 0.4 percent and is trading near 1.12275. Among the important resistance it is worth noting the level of 1.1275 (MA50) and 1.1290 (the resistance of the descending channel). Coming later today events represent a serious threat to those technical levels.
The material is provided,