A Quick Preview: U.S. FOMC Interest Rate Decision followed By Press Conference; July 27, 2022

A Quick Preview: U.S. FOMC Interest Rate Decision followed By Press Conference

The key event for the day is U.S. FOMC Interest Rate Decision scheduled at 1800 GMT/2330 IST followed by FOMC Press Conference (1830 GMT/0000 IST). All the eyes are eagerly waiting for the Fed’s Decision to predict the further directions of the U.S. dollar. Today will be the 4th consecutive rate hike by Fed and Markets are expecting U.S. Fed to hike rates by 75 basis points.

Here is what traders are looking for and key facts to keep in mind while trading during U.S. session:

  • Ten-year Treasury yields have slumped almost 75 basis points in just a matter of weeks.
  • What will be the Size of interest rate hike? 75 bps or 100 bps?
  • During last meeting, Fed stated that, “the committee is highly attentive to inflation risks.”Any changes in that statement would be consider as aggressive tightening could tip economy into recession.
  • The language of the Fed Statement and Press Conference will remain in focus. Will it be dovish or hawkish?
  • Fed will also continue to reduce its $9 trillion balance sheet.
  • Investors are looking for any hint on interest rate hike path for the September meeting too.
  • The rising fear of Covid and steps to fight it out may get some aid from the Fed.
  • Depending up on the fundamental results, Powell may leave his option open when they meet in September.

Technical View:

XAU/USD (Gold):

  • Gold erases previous gain and slips back below $1,720 mark.
  • The pair made intraday high at $1,725 and Low at $1,713 mark.
  • A day chart is down and H1 chart with triple EMA suggests up trend for the time being.
  • A sustained close above $1,724 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,715 on H1 chart will test further supports.
$1,715 $1,728
$1,709 $1,732
$1,704 $1,738
$1,698 $1,742
$1,691 $1,748

Take a look and do trade wisely!
Good Luck