
NZD/USD: US yield advantage keeps pressure on the Kiwi
NZD/USD has become unusually sensitive to relative front-end rates, with the US two-year yield advantage now near historically extreme levels.
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NZD/USD has become unusually sensitive to relative front-end rates, with the US two-year yield advantage now near historically extreme levels.

Defining support levels are coming into focus across key charts, including EUR/USD and the Nasdaq, following the Federal Reserve’s rate hike and a 6% drawdown in UKOIL.

The Fed delivered a unanimous hike, stronger economic projections and a more hawkish dot plot, giving markets little reason to unwind aggressive tightening bets and keeping the dollar firmly supported.

While momentum is clearly backing bullish US dollar bets for now, I maintain my bigger picture view that it has topped for the year despite the Fed’s hawkish hike

It’s a delicate balancing act for Kevin Warsh at today’s FOMC meeting where the bank is highly expected to raise rates for the first time in three years. The Nasdaq 100, meanwhile, hasn’t set a fresh high since the day before his first press conference.

Markets were a bit calmer during the first half European sessions, as oil prices eased lower and that encouraged some dip-buying in indices and gold. But the FX markets were little-changed, with the USD/JPY trading around that pivotal 155.00 handle ahead of the Federal Reserve’s rate decision later on.

Key scenarios to watch on the GBP/USD and DJIA charts amid rate-hike risks and a potentially hawkish FOMC decision tonight. These factors are supporting risk-off sentiment alongside strong trends across energy markets and U.S. Treasury yields.

GBP/USD steadies near support as traders await UK CPI and the Fed, while rising BoE hike expectations keep sterling risks firmly in focus.

Assuming the Fed delivers the expected hike, traders will want to know WHAT could prompt another hike, WHY they hiked this time, and HOW to interpret the dot plot.

Gold, Silver, DXY Outlook: Charts test defining support levels as crude oil prices hold above $100, U.S. Treasury yields move higher and hawkish FOMC risks come into focus. Key scenarios to watch.

From 1994 and 1999 through to the dollar surge of 2022, history shows Fed tightening has produced very different outcomes for DXY.

USD/JPY, Nasdaq Outlook: Rate hikes, AI-related concerns and rising crude oil prices are among the major headlines limiting risk appetite this week while supporting the U.S. dollar and USD/JPY.

Central bank decisions will dominate the calendar, but with both hikes largely expected, energy prices, US yields and lingering threat of intervention could prove just as important.
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