The markets, at least so far, are not doing much today – there is little movement, and this is probably because the U.S. FOMC Statement and Federal Funds Rate are due for release in a few hours. It would be a huge surprise were there to be any change in rates, and this would create at least a major spike in the price were it to happen. However, it almost certainly won’t, and as there will not be a press conference, all we will have to go on will be to see whether anything has changed in the statement. Now, even if the event isn’t important, quite often liquidity is only released after it, so even with no surprises in the statement we should see some movement in the Forex market after the release. Yet it seems unlikely that it will create truly major directional movement.
Yesterday we got the monthly input from the Reserve Bank of New Zealand. This was especially interesting because the NZD has been very bullish over recent days, and just broke out to the upside quite strongly last week, making a new 20-day high on sharply increased volatility. So, when you have a trend movement like this, central bank input becomes especially important, because it often gives a trend move an extra helpful boost, or alternatively, it can burst the bubble. Yesterday’s release did not do either, the NZD has been quite flat, and maybe that is not surprising as the central bank’s words and actions were quite neutral.
The only other things worth mentioning are firstly, major British GDP data due Friday, which is important with the Pound being in a lot of focus lately due to Brexit, with some analysts hinting we may be seeing the beginning of a strong bullish movement in the GDP if a deal with the EU is concluded later this month. Secondly, the Democrats retook control of the House of Representatives in the U.S.A. which will make life a little more difficult for President Trump but has no real economic impact. Finally, the U.S. stock market rose strongly yesterday, and major indices are now back above their 200-day moving averages. It will be interesting to see whether this persists.