In This Economy?

How to trade FOMC events

| May 31, 2023
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    In This Economy?

    How to trade FOMC events

    May 31, 2023
    Federal Open Market Committee (or FOMC) meetings occur ten times per year every five to six weeks for the Fed to decide on US interest rates. The FOMC tries to match what they feel is the correct interest rate environment with the current economy, which they measure by looking at inflation, stock prices, and more. FOMC meetings can create volatility in stock, bond, forex, and commodity markets, which day traders and investors can find opportunity in. Standard deviations can help to measure potential risk and reward during these events, and you can find this data in the above presentation. Learn how to trade the next FOMC event.

    EUR/USD has closed lower 18 of the last 20 days to conclude the month of May, and the major forex pair fell more than 400 pips in the same period. Worse-than-expected economic data in the Eurozone teemed with a more hawkish US Federal Reserve to bring US dollar appreciation against the euro currency. EUR/USD has been as low as 0.9550 in the last year and 0.9000 in the last 30 years; the major forex pair currently trades around 1.0700. EUR/USD sentiment is 67% long.

    Crude oil fell more than -8% in the last week of trading - a move that's occurred less than 10% of the time in the last few years. The energy commodity now trades under $70 per barrel, which is approximately the low for the last year of trading in crude oil.

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