Hawkish Tones from the FED: Indices Waver, USD Rises

Following the anticipation surrounding the Federal Reserve’s decision, outcomes largely played out as expected. The interest rates remained untouched. However, what did capture the market’s attention was the Federal Reserve’s slightly hawkish tilt. They hinted towards one more potential rate hike, a 25 basis point rise, slated before this year concludes. Yet, there’s a twist in the tale for the subsequent year. The Federal Reserve indicated fewer rate cuts, tuning down from the expected 100 basis points to just 50 basis points. This hawkish tone from the FED spurred a decline in the indices while simultaneously bolstering the USD.

Yet, the macroeconomic calendar isn’t devoid of action. Switzerland, known for its banking prowess, delivered its interest rate verdict. The Swiss National Bank (SNB) opted to keep the rates steady, which, in essence, was a curveball, as market sentiments had anticipated a 25 basis point surge. The day isn’t over, though. Upcoming are the interest rate revelations from the UK and the unemployment claims statistics from the US.

Revisiting Wednesday’s trajectory, the USD emerged triumphant, sitting atop as the strongest currency. The GBP and JPY languished at the other end of the spectrum. As trading unfolds today, the USD’s bullish momentum is evident, and the CHF’s weakness post the interest rate verdict stands out.

Switching gears to the indices, there are palpable undercurrents of bearishness. The S&P500 teeters close to the lower boundary of the symmetric triangle. The Dow Jones is on a precipice, threatening to breach a pivotal horizontal support and the sacrosanct long-term uptrend line. Such movements in the market behemoth like Dow Jones can send shockwaves.

On the forex front, the EURUSD is inching towards the lower echelons of its mid-term channel down formation. USDJPY is riding high, charting new long-term peaks. Meanwhile, the USDCHF dynamic showcases two forces at play – the faltering CHF and the ascendant USD, as the pair nears the key resistance level of 0.91.

Lastly, commodities are not immune to the market tremors. Post the formation of the shooting star on the charts of precious metals and oil, a downward spiral ensues. Indicators suggest the advent of a mid-term correction in the commodities arena.

Source: https://www.axiory.com/analytics/market-news/hawkish-tones-from-the-fed-indices-waver-usd-rises