FOMC

With US yields lower and hinting at a swing high, the relationship between AUD/USD and the AU-US 2-year spread appear to be back on talking terms. And that could bode well for AUD/USD bulls if US yields continue to fall in line with my bias.

Stocks showed a strong reaction to the Fed and Gold hit a fresh ATH. Currencies were more muted but the question now is follow-through given the tenuous tariff topic.

EUR/USD has cooled from the earlier March breakout, but bulls haven’t waved the white flag yet and today’s FOMC rate decision brings the potential for volatility.

Oil prices retreated to $66 amid growing concerns over global economic growth, rising inventory levels, and oversupply risks, further pressured by OPEC’s April supply plans. With the (FOMC) meeting on the horizon, market participants are closely watching for signals on the Fed’s policy stance and its implications for oil demand.

With the US Federal Reserve to make its own policy announcement later, the USD/JPY outlook could take a new direction in the near-term, as the pair continues to test a major resistance zone near the 150.00 area.

USDJPY, DXY Forecast: The Bank of Japan (BOJ) held interest rates at 0.5% as expected, amid tariff uncertainties, while the U.S. Dollar Index (DXY) remains near its 2025 lows ahead of the FOMC outlook, keeping markets on edge.

With U.S. rate cut bets scaled back, EUR/USD and GBP/USD have struggled to extend their recent rallies. The FOMC decision could determine whether that trend continues or sparks a sudden reversal.

We have two powerhouse central bank meetings lined up over the next 24 hours. While neither the BOJ or Fed are expected to change policy, the FOMC release their updated forecasts which will provide the first glimpse of their expectations of Trump's tariffs. Implied volatility for USD/JPY is, quite rightly, elevated.

With both the Bank of Japan and US Federal Reserve to make policy announcements, the USD/JPY forecast could take a new direction in the near-term outlook, as the pair tests a major resistance zone near the 150.00 hurdle.

Gold Forecast: Market uncertainty from trade wars, geopolitical tensions, and a weakening US Dollar has driven gold past $3,000 ahead of the FOMC meeting. The key question now—where is the next resistance?

Upside risks to the Fed’s inflation forecast are likely to hamstring Jerome Powell and the FOMC from delivering any imminent interest rate cuts.