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FOMC

Euro struggles at 5-year lowsEUR/USD suffered a dismal week, plunging 2.33%. The euro broke below the 1.05 line on Thursday but has managed to recover. The ECB doesn't meet until June, but policy makers will be closely monitoring eurozone inflation, which continues to climb. It was only a few months ago that ECB President Lagarde was dismissive about rising inflation, saying that it was a transient development (readers will recall the exact same stance from Fed Chair Powell). We certainly won't be hearing the 'T" word anymore with regard to eurozone inflation, which hit a massive 7.5% in April. The ECB may not stay in sync with the pace of tightening by the Fed and other major central banks, but the ECB is signalling that the issue is not whether to hike, but when and by how much. There are hawkish voices within the ECB calling for a June hike, but September could be the month to circle in the calendar, which will give policy makers additional data to review before making any moves. In the case of the Fed, tighter rates are a given, with spiralling inflation, a tight labor market and robust growth. It's a trickier scenario for the ECB, as eurozone growth has not been as strong and the Ukraine war and Russian sanctions have dampened economic growth. There are concerns about stagflation, and these risks will rise as the ECB raises rates. We can expect the ECB to tighten policy in the coming months, but at a much slower pace than the Fed. The FOMC meets on Wednesday and a half-point hike from the Fed is practically a done deal. This will be a significant move, as the Fed hasn't delivered such a large rate increase in 20 years. The Fed has hinted at additional half-point rates in June and July, and some analysts are even predicting super-supersize hikes of 0.75%, which hasn't happened since 1994. The Fed is in full throttle trying to catch up to the inflation curve, and this widening of the US/Europe rate differential could push the euro to 1.03 and perhaps even to parity in the coming months. There is resistance at 1.0612 and 1.0699 1.0408 is providing support, followed by 1.0321
by OANDA
1
Bitcoin Pivotal Week AheadBTC has followed a descending parallel channel since Nov 2021 ATH shedding >52% in late Jan to.$32.9k. Since the low, BTC rallied to a local high of $48k in late March before resuming the gradual mark-down. Currently sitting >40% from ATH @ $38.8k. Bitcoin Weekly Chart currently above 100 EMA while the 20 EMA has crossed below the 50. Previous FOMC in early March following 25 bps hike, the market rallies in the face of a "hawkish sounding" Federal Reserve... casting doubt on the seriousness of reining in rampant inflation that's achieved highest levels in >40 years w/ no sign of slowing. Critical juncture in price action, as BTC will likely put in a red daily candle Monday 5/2 and look for direction from the broader markets over May 3rd & 4th. Potential for market upswing following the Fed's decisions is possible and would fall in line with March market response to Fed's seemingly hollow words. The more like scenario is market realization that inflation is problematic and Fed's efforts to reduce central bank balance sheets via quantitative tightening has teeth and will continue the gradual market corrections we've seen in Q1. Macro factors are indicating headwinds continue as GDP in Q1 was down, labor remains incredibly tight, prices remain unsustainably high. Bitcoin likely to creep down to $35k range as the market considers Fed actions and decides on a direction.
COINBASE:BTCUSD
by R0MM3LL
Backtesting the FOMC meetings: are the rate hikes priced in?I’m going to profit off of the fact that next Tuesday (May 3rd) the Federal Open Market Committee (FOMC) main meeting will take place to backtest how this event affects the markets (focusing on Bitcoin but in the end all the markets are connected). Firstly, I’m going to talk about what I expect Jerome Powell to say in the upcoming meeting, and then I’ll explain how they affect price. Lastly, I’ll estimate some technical targets. Meeting expectations So briefly, the results of the last CPI were 7.5% year over year (YoY) inflation, not above nor below the expectations. The jobs report that came out on March 31st showed signs of rising wages and a decrease in unemployment. As these events are already priced in as they happened weeks ago, the approach I want to take on this data is that the Fed wants to keep their position, not too dovish but not too hawkish, as the expectations are being met. The thing that the Fed has looked more at is the current conflict in Ukraine, which affected supply chains but, surprisingly, didn’t reduce consumer demand. And this means that they will have to start being more aggressive on the next rate hikes, announcing 50 basis points (bps) in the next two meetings. Regarding this unpredictable situation, if they keep the same position (which I see likely), they would want to return to 25 bps hikes as soon as they can. The market reaction With all that said, the Fed is likely to maintain their ideas, so I’ll dive into the backtesting part of the article. If we take the distance between every meeting since January 2021 and the next swing high/low (in percentages), and do an average excluding the outliers, we get around 8% move to the upside after every meeting. Note that this is usually driven by momentum, and the market reaction in the long-term may be totally different (as we see in November and December). However, the Fed has changed (and thus the market reactions) since they said inflation is no ‘longer’ transitory. The odds of a recession started to get higher and the fear kicked in. Then, in January, I think the price reacted positively as the Federal Reserve showed that they might not turn hawkish. And the same happened in the last meeting, when everyone feared the consequences of the war. Nothing can change now: we have a catalyst (the Fed announcing they’re going to hike 50 bps instead of 25), markets have trended down before the meeting and technical analysis, though especially on-chain analysis are still showing bullish signs. Targets based on technical analysis Before anything, I’m still confident we have to take the liquidity below $37k, which I expect to see at the start of the week, before the FOMC. Usually liquidity taking action implies that there is going to be a bounce just after the price is reached, so this makes percent sense if we add the volatility that there should be during the meeting. In the next few days after it, I’d expect at least the high Bitcoin has set a few days ago at $40.4k to be taken, which is a 10% upside from $37k (close to the average move since 2021). If we end up going higher I’d expect the fair value gap (or FVG) at $45k to fill, which would represent a 22% move (similar to the last two meetings). Lastly, I’d expect the SPY to move similarly and try to consolidate somewhere around $440 as most earnings haven’t been bad, with the only big exception being Amazon.
BITSTAMP:BTCUSDLong
by config_json
Graph Protocol Relief RallyNear-term long positions are attractive, with reassessment necessary as inflation reporting in April approaches. Bullish continuation will be more risky in the days leading up to CPI/PPI reporting. Following Bitcoin and the broader markets, GRT will realize near-term bullish support as the markets have shrugged of the Fed's 25 bps rate hike. GRT will flip 20 EMA into support, then push through 100 EMA... ultimately testing 200 EMA until next round of economic reporting. Sharply rising prices are elected to continue as there's been no substantive change to monetary policy, QE continues, corporations continue elevated pace of stock buybacks. Inflation results for March (CPI & PPI) will be published by BLS on 4/12 & 4/13 with high likelihood of further increases from the lagging reporting. April reports will be a pivotal as the FOMC will not meet until early May with the April inflation results published a week after the Fed meeting. Current expectation is shockingly higher inflation with the Fed's hand being forced, either accept persistent inflation and risk a wage-price spiral or adjust approach with more hawkish action and less reliance on hollow words. Maintaining status quo until midterm elections is likely to become untenable, recession risk is increasing.
BINANCE:GRTUSD
by R0MM3LL
DXY: Bull Market is Approaching an Important Resistance Level The recent US interest rate hike and an “unexpected” dovish statement given by the ECB during the EU interest rate decision this month provided further bullish momentum for the DXY . However, no key levels are actually broken at the moment and DXY is still moving well within the yearly channel between the level of 89~90 and 102.50~104. DXY is currently approaching the yearly resistance level of 104.00. This is a key level to watch as it is the high back in 2017. For buy opportunities, we are waiting for some kind of a pullback first before entering buy positions. Also, a clear breakout of 104 level would also give us the green light to capture pullback at 104 level, but this is a risky buy setup as we do not want to get our positions stucked if a period of correction occurs. For sell opportunities, we are not currently looking for any sell entries because there are simply no bearish patterns being formed. We will consider sell entries once the market creates a lower low first. But we cannot foresee that yet in the near future.
TVC:DXYLong
by NicoBeau_Capital
BTC Vs FED FOMC Meeting"Elon Musk Buy Twitter" news work as fuel for Market. DOW Bounce near 600 point and bitcoin back to $40000+ after announcement. $42500 is major resistance for bitcoin and Market cant ignore FED FOMC meeting on May 4. Bears will like to play short near $42500. Daily closing above $42500 will create fresh momentum in market. If BTC hold $37k support till May 4 than it will be very good for Bitcoin market. BTC VS FED FOMC Meeting: FED FOMC meeting turn into one of the main trigger for Bitcoin. We can see in chart that BTC price slip before Fed Meeting, before going up again after. Same we saw from last 4 days. Twitter news has been pumping market but its good to eye on daily closing, But be ready for volatility, Market can give more opportunity before FED FOMC meeting
by sebastianjohansen
Timing is everything! While the general direction for the US Fed and the ECB are similar, their timelines differ greatly! On the US Fed (USD) front, we are days away from the next FOMC meeting (4th May 2022) where market participants are expecting a 50 bps hike. On the ECB (EUR) front, the ECB is expected to taper its asset purchase program by early Q3, before it will consider any rate hikes. The difference in timelines of the Fed and ECB could provide some interesting hints on where the EURUSD is heading in the short term. With the Dollar being the first mover here, we expect strength in the dollar to drive the EURUSD lower over the short term before the ECB firms up its hike schedule. The EURUSD pair is also trading just below the 7- year support level. Zooming in on a shorter timeframe, we also spot a breakout and retest at this level, suggesting the move has begun. Entry at 1.08070, stop above 1.12080. Targets are 1.06760 and 1.03835. Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
CME:6E1!Short
by inspirante