The major event risk across financial markets today will be Federal Reserve policy meeting, which is widely expected to conclude with key US interest rates being hiked by 25 basis points.

With a rate hike in June considered a done deal, investors may be more concerned with the economic projections and press conference  with Fed Chair, Jerome Powell. Markets are poised to closely scrutinize the Fed’s monetary policy statement for clues on how fast the Fed may raise interest rates during the second half of this year. With inflation jumping to a six-year high in May and the US economic outlook looking encouraging, it will be interesting to see if there is an upgrade to the “dot-plot” forecasts. If the Federal Reserve expresses optimism over the health of the US economy and offers fresh insight into rate hike timings beyond June, this could be viewed as hawkish by market players.

Traders will also closely scrutinize Mr. Powell’s comments for any signs of inflation fears returning or that trade tensions have impacted monetary policy. Expectations over the Fed raising rates more frequently could heighten if Powell announces that he will be holding news conferences after every policy meeting.

In regards to the technical picture, the Dollar Index remains firmly bullish on the daily charts with 94.00 acting as a level of interest. A solid breakout above this level could trigger a jump towards 94.30.

Turkish Lira tumbles ahead of FOMC

A growing sense of anxiety over Turkey’s looming presidential and parliamentary elections next week has left the Lira vulnerable to downside risks.

Heightened expectations over the Federal Reserve tightening monetary policy simply added to the Lira’s woes, with the local currency tumbling across the board today. With high inflation fears and political instability in Turkey likely to continue haunting investor attraction towards the Lira, currency weakness could remain a recurrent market theme.

Focusing purely on the technical picture, the USDTRY is currently following a positive trajectory on the daily charts. Prices have scope to punch above 4.700 if the Lira continues to depreciate.

Commodity spotlight – Gold

Gold drifted slightly lower ahead of the Federal Reserve meeting this evening, which is expected to conclude with the announcement of an interest rate increase.

For an extended period, the yellow metal has bounced within a range, with $1300 acting as a psychological pivotal point. Price action continues to suggest that Gold needs a fresh directional catalyst to make its next significant move. A US rate interest rate increase in June coupled with expectations of further rate hikes during the second half of the year could spell trouble for zero-yielding Gold.

Focusing on the technical picture, investors will continue closely observing how prices behave around the $1300 level. A breakout above $1300 could trigger an incline towards $1324. Alternatively, a failure for bulls to conquer $1300 is likely to result in a decline back to $1280.

Điều khoản miễn trừ: Nội dung trong bài viết này bao gồm các quan điểm cá nhân và không nên được hiểu là thông tin tư vấn đầu tư cá nhân và/hoặc tư vấn khác và/hoặc một lời đề nghị và/hoặc chào mời cho bất kỳ giao dịch nào liên quan đến các công cụ tài chính và/hoặc sự bảo đảm và/hoặc dự đoán về hiệu quả đầu tư trong tương lai. ForexTime (FXTM), các đơn vị liên kết, đại lý, giám đốc, cán bộ hoặc nhân viên của công ty không đảm bảo tính chính xác, hợp lệ, kịp thời và đầy đủ của bất kỳ thông tin hoặc dữ liệu nào được cung cấp và không chịu trách nhiệm về bất kỳ tổn thất nào nảy sinh từ bất kỳ khoản đầu tư nào dựa trên các thông tin hoặc dữ liệu đó.