A1 Trading

Fed Doubling Down on Hawkishness

November 3, 2022
Michael J. Donoghue
Fed Doubling Down on Hawkishness

Yesterday afternoon, the Federal Open Market Committee (FOMC; the Federal Reserve’s policy making body) met market expectations by implementing another 75 basis point interest rate hike. With this now being the fourth time in a row such a large hike has occurred, this was not the central story of the day; rather, it was Fed Chair Powell’s shocking press conference afterwards. While answering reporters’ questions, he repeatedly explained that, while the size of the rate hikes could grow slimmer soon, the Federal Funds Rate must now increase to a level previously thought unnecessary. He also mentioned preferring to err on the side of over-tightening monetary policy, since it would be easier for the Fed to lift the US economy out of contraction than to stamp out overheating. With the Federal Funds Rate now at 4% and the Fed doubling down on hawkishness, USD seems primed to continue its historic climb once again as US equities suffer.

Three Potential Pairs to Buy

According to the EdgeFinder, A1 Trading’s market scanner which offers traders an array of supplemental analysis, the following three pairs are viewed quite favorably for USD bulls. They are listed below with their respective ratings, signals biases, and corresponding charts. Tomorrow morning’s big US labor news, which will be discussed in a subsequent article today, will likely provide yet another fundamental catalyst that will influence price action for these pairs.

1) USD/CAD (Earns a 7, or ‘Strong Buy’ Rating)

Fed Doubling Down on Hawkishness
Fed Doubling Down on Hawkishness

2) USD/CHF (Earns a 6, or ‘Strong Buy’ Rating)

Fed Doubling Down on Hawkishness
Fed Doubling Down on Hawkishness

3) USD/JPY (Earns a 5, or ‘Buy’ Rating)

Fed Doubling Down on Hawkishness
Fed Doubling Down on Hawkishness

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