A1 Trading Company

March 18, 2024

FOMC Predictions This Week

Frank Cabibi

This week's FOMC meeting is going to stir major markets as the US indices start off in the green. Some demand has returned to the dollar as well while gold and oil remain in consolidation. Here are the probable outcomes we think will happen in this week's FOMC.

EdgeFinder Analysis

USOil remains in the bullish camp according to EdgeFinder analysis. At +6, the commodity is back above a significant resistance level on the 1D timeframe. The score moved up 2 points today on retail sentiment leaning more towards neutrality and a higher trend reading.

What we will likely see from the Fed on Wednesday are unchanged interest rates as inflation may start to be more of a threat to monetary policy. This will likely either mean high rates for longer and a delay on the rate cuts. It seems pretty improbable for the Fed to hike at this time now.

Gold is still holding itself above support on the previous all time highs around $2,148. With today's candle showing rejection from the lows and a possible bullish hammer, the metal may be able to hold itself above support.

Although the dollar is rising today, gold is also up. After a meteoric run to new highs, the metal may be ready to take a break for a while before the FOMC. Traders are looking out for the potential weakness in gold's market if the Fed does not show any concerns around inflation.

NZDUSD ticked up one point today but is still in the bearish territory. Retail sentiment is now under 60% long, COT suggests dollar bullishness and kiwi bearishness, and the score flip from March 14 suggests further moves lower.

Investors might be gearing for a stronger dollar this week as the Fed may want to keep rates higher for a while. New Zealand also releases their GDP numbers on Wednesday which is expected to come in higher than last month.

Retail Spotlight

Cryptos are now the most bought assets in the retail crowd. They also seem to be majority dollar short, index short, and oil mixed.

Smart Money Spotlight

COT is heavily long NIKKEI, metals other than gold, and USD this week. Meanwhile, bitcoin, oil and NASDAQ were not getting much attention. Gold is slightly selling while many currencies like AUD, CHF, CAD and NZD are being sold. It seems like a risk-off sort of week if smart money is bullish dollar and metals.

Fundamental Spotlight

Japan released their rate statement today which remained unchanged for the quarter at -0.10%. Forecasts still have rates moving higher throughout 2024 however. Expectations go as high as 0.37% by the end of the year.

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