ALL EYES ON FOMC MEETING!
In the USA today, the Fed is expected to announce the interest rate decision at 22:00, while at the same time the interest projection for 2021 will be announced, constituting the most important agenda item of the markets. What FED President Jerome Powell will be speaking at the press conference right after the decision is a great concern in global markets. While no interest rate decision change is expected from the meeting, there is an expectation that the Fed will verbally direct its asset purchases. It is within the expectations that Fed officials will shape the future of asset purchases according to employment and inflation measures.
It is a matter of curiosity whether the Fed will show a pigeon or a hawk stance especially regarding the economy affected by the Covid-19 outbreak. With the possibility of verbal prompting regarding the Fed meeting, the prospects for the economy may be somewhat more optimistic since the encouraging news about vaccines. However, at this point, more eyes have been turned on the decision to be issued for the US stimulus package. The size of the stimulus package will represent the extent to which the recovery in the economy is tolerable. At this point, while the current policy stance is not expected to change, how the economic projections are determined for 2021 will be an important component of the Fed's hawk or dove stance. At this point, we think that the dollar negative scenario can be triggered if the Fed maintains its pigeon stance by not taking action and promises not to increase interest rates until 2023.
In the case of a statement by the Fed that it will not take action in interest projection until 2023 by taking a dovish stance, the pair may reach 1.2285 resistance with an attack above 1.2180. Thus, we can see that the rises are targeting 1.24 resistance. However, in the event of a possible hawkish stance, we follow the decreases in the parity within the framework of the support threshold of 1.21 and below this level, depending on a premium in dollar assets.
In case the Fed continues its wait-and-see policy in line with the expectations, the rise in precious metal with the fate of the weak dollar scenario may target the 1870 resistance. In an image that may occur above this level in precious metal, we watch the rises within the frame of the 1890 resistance. However, due to a weakness in the general picture, it is worth noting the 1850 support level below.
In the index, which passes the day with a rising momentum, albeit limited, if the Fed promises not to increase interest rates until 2023, the upward movement may enter into acceleration. Thus, upward attacks in the index can be expected to accelerate above the 12.675 level with the 12.800 threshold. However, in a downward acceleration that may occur, it is useful to consider the 12.560 and 12.470 supports gradually in the short term.