Forex Today: Stocks, Crypto Lower Ahead of FOMC Rate Hike

Adam Lemon

The risk-off mood continues in global markets but slows somewhat ahead of today’s anticipated rate hike by the FOMC.

  • The market is eagerly awaiting a very major event in the calendar: tonight’s FOMC rate, statement, and projections. A rate hike of at least 0.50% is all but certain, but some analysts believe a hike of 0.75% is likely, which would likely trigger a stronger sell-off in risky assets if implemented.
  • Good opportunities remain in the market for traders to short “risky” assets.
  • The risk-off environment and hawkish FOMC is producing a clear long term trend against stocks, cryptocurrencies, and riskier currencies, and boosting yields and the US Dollar. The momentum of these movements has mostly slowed somewhat in recent hours, which is typical as an FOMC release approaches.

  • Stock markets have begun to stabilize in recent hours, but the S&P 500 again closed yesterday at a new 15-month low. The US stock market is well into bear market territory.
  • BTC/USD did not reach a new low yesterday, but is looking very weak and currently falling with bearish momentum below $21k. The price could trade as low as $13k in a matter of days, according to technical analysis of the bubble of recent months. There are likely to be a lot of forced liquidations of long positions happening now, and if the price reaches approximately $19k, much more. It is a similar story in Ethereum, while minor coins are at risk of disappearing altogether.
  • The Forex market continues to be dominated by a strong USD, with the US Dollar Index yesterday briefly trading at a new 20-year high. Its major movement was expressed in the USD/JPY and GBP/USD currency pairs, with the USD/JPY reaching another new 24-year high price. The USD is stronger on rising yields, with both the 2-Year and 10-Year US Treasury Yields powering to new highs yesterday.
  • US Treasury Yields are continuing their strong rise, with the 2-year yield reaching a 14-year high at 3.454% yesterday.
  • Commodities are generally falling in value, as is typical during strong risk-off market sentiment.
  • There will be a release of US retail sales data later today.
  • Daily new coronavirus cases globally fell again last week, continuing a long-term trend.
  • It is estimated that 66.3% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.9% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
  • Total confirmed new coronavirus cases worldwide stand at over 541.7 million with an average case fatality rate of 1.17%.
  • The rate of new coronavirus infections appears to now be significantly increasing only in Belize, Brazil, Chile, Germany, Guatemala, Uruguay, and the UAE.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.