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What Lies Ahead with the FED?

October 12, 2022
by Joseph Jeffriess, Market Analyst

Hi, and welcome to Wednesday’s update. Today we are looking at the USD, and it’s hard not to focus on the dollar with all the key news that’s on the way.

From tonight, 11:30 local time (AEDT), we have PPI followed by the Fed minutes at 5:00 am and US CPI data at 11:30 pm to cap it off. The CPI data being released will be both the M/M and the Y/Y.

This could be an important period for the markets. The last Fed minutes shocked the markets, and CPI came in hotter than expected. These surprises led to extended moves lower on risk markets and solid a rally on the USD. Will we see a repeat this time?

In today’s video, we run over the USD and USDCAD, highlighting levels we’re keeping an eye on. For instance, we are starting to see a small bull trap on the USD and new resistance developing on the USDCAD.

As noted in today’s video, it is going to come down to what’s released. CPI beats expectations. Fed remains hawkish we see the USD rallying. If CPI misses and the Fed message is not as hard as we have seen, we could see some selling and a move higher from risk markets like we saw just over a week ago.

It is definitely going to be an interesting period to watch traders from now until Thursday night local time.

USD Analysis Video

 

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