Wednesday Briefing: From DXY, FOMC Meeting & Gold to Latest Russia – Ukraine Conflicts; June 15, 2022

US Dollar Index Overview

• The DXY exhibits range bound movement and stabilizes above 105.00 mark.
• The intraday high is 105.38 and low at 104.71 mark.
• A day Chart and H1 chart with triple EMA suggest bullish trend for the time being.
• Immediate hurdles are seen at 105.40 to 104.70 mark.
• A sustained close of either side on H1 chart requires for the further directions of the U.S. dollar.

FOMC Meeting Review & Technical Analysis of Gold:

The most awaited event is just a few hours away and that is U.S. FOMC Interest Rate Decision. Markets expect 50 basis-point interest-rate increases in today’s Fed Meeting but keeping in mind the higher than expected May’s Inflation results and Lower than expected Retail Sales data may give a U – Turn in Fed’s expected policy. Some investors betting that the Fed Chair Powell may deliver a super-sized 75 basis-point move unless price pressures cool. Traders are confused between 50 or 75 basis points? What will come on the table by Fed official and how does the FX market absorb the Fed’s decision on interest rate? Let’s wait and watch the movement for the time being.

• Gold spikes up sharply as U.S. released Key Retail Sales data with Negative Numbers and jumps back above $1,836 mark.
• The pair made intraday high at $1,836 and Low at $1,807 mark.
• A day chart and H1 chart with triple EMA suggest bearish trend for the time being.
• A sustained close above $1,838 on H1 chart requires for the upside rally.
• Alternatively, a consistent close below $1,818 on H1 chart will test further supports.

Key Headlines for the FX market:

• European markets rallied on news that the European Central Bank would hold an emergency meeting on the recent bond market sell-off ahead of what is expected to be the most aggressive rise in U.S. interest rates since 1994.
• Bond investors are embracing safety in their portfolios as volatile markets price in a super-sized hike from the Federal Reserve following evidence of scorching inflation.
• Bitcoin tumbled to a new 18-month low, dragging smaller tokens down with it and spurring a sharp fall in crypto markets sparked by crypto lender Celsius freezing customer withdrawals.
• Thailand’s opposition parties filed a no-confidence motion against Prime Minister Prayuth Chan-ocha and 10 cabinet ministers, accusing them of graft, economic mismanagement and of undermining democracy and clinging to power.
• The United States backed Taiwan’s assertion that the strait separating the island from China is an international waterway, a further rebuff to Beijing’s claim to exercise sovereignty over the strategic passage.

Latest updates on Russia – Ukraine Conflicts:

• Ukraine showed no signs of obeying a Russian ultimatum to surrender the eastern city of Sievierodonetsk as NATO defense ministers gathered in Brussels to discuss sending more heavy weapons to replenish Kyiv’s dwindling stocks.
• Russia had told Ukrainian forces holed up in a chemical plant in the shattered city to stop “senseless resistance and lay down arms” from Wednesday morning, pressing its advantage in the battle for control of eastern Ukraine.
• Ukrainian President Volodymyr Zelenskiy urged the European Union to let his country start on the road to membership of the bloc, warning that Russia’s territorial ambitions stretched from Warsaw to Sofia.
• President Emmanuel Macron voiced a tougher line on Russia and said Europe needed to send a strong signal to Ukraine as he sought to assuage concerns in Kyiv and among some European allies over his previous stance towards Moscow.
• The Baltic states of Estonia, Latvia and Lithuania have been calling for their region to receive the biggest build-up of combat-ready NATO forces in Europe since the end of the Cold War, to be agreed at a summit on June 28-30 in Madrid.

Source: Reuters

Keep an eye open for the latest news and fundamentals affecting the FX markets.

Take a look and do trade wisely!
Good Luck