What will happen during FOMC today? – Forex Market Analysis

Hello everyone; it’s Dale here. Today I’ll do a little overall market analysis, but before that, I’d like to invite you to a webinar that will take place tomorrow. The webinar will be about VWAP trading, so you are all welcome, and I’m looking forward to seeing you there. Mark it on your calendar.

Now, let’s talk about the markets. The currency markets currently have two things in common: the first is a huge candle or huge volatility after the NFP news on Friday, and the second is rotation. Major pairs, which means those with the US dollar, like the EUR/USD, have increased volatility and then rotation. Crosses that don’t have the US dollar only have very long rotation.

Let me show you on a couple of charts. This is AUD/USD showing volatility and rotation. This is USD/CAD, again showing volatility and rotation. It’s the same on all majors. Crosses like AUD/CHF show not much action for a long time. I’m showing you all this on the 30-minute chart. For example, AUD/JPY has had no action for six days. CAD/CHF also shows no action for a long time. When there’s no action, it means that the markets are waiting for something, and the longer the rotation, the bigger the action afterward.

Currently, the pairs have this in common. The catalyst for action, in my opinion, will be today’s macro news, including inflation news, the federal funds rate, FOMC statement, and FOMC
press conference. These are very important events that usually lead to huge volatility. I think the markets are waiting for this impulse.

Now, I want to show you one thing on the Euro. There’s an opening gap from Monday on Forex, which is not very usual. Usually, these gaps get filled. So far, this gap hasn’t been filled, and it’s already Wednesday. If I had to guess, I’d say that during macro news, either the CPI or FOMC news will close the gap. Leaving it open would be an anomaly. If you look at the volume profile, there were heavy volumes traded above the gap. The price could close the gap and react to that heavy volume zone. The price has reacted to this area in the past, breaking out of a huge rotation with volumes at the low of the rotation. During the macro news, this could give the Euro the impulse to close the gap. If the sellers are strong, as they seem to be, they will react to this volume cluster and the low of this area.

Trading during macro news is very risky, so I won’t be trading this. Increased volatility could make the markets go crazy. The other scenario is that despite the macro news and likely volatility, the Euro won’t close the gap. If the gap remains untested, there will be a downtrend, indicating that sellers are in control.

That’s my overview of the market and my opinions on the Euro. If you’re interested in learning more about volume profile trading, head over to my website, Trader-Dale.com. For the best volume profile education, check out my trading course and tools. The volume profile pack focuses on volume profile trading and includes my custom volume profile indicators. The order flow pack teaches everything about order flow trading. There’s also a combo pack that includes both the volume profile and order flow packs.

Thanks for watching the video, and happy trading!