FXCM's USDOLLAR basket is bid ahead of Fed Chair Powell's testimony to the Senate today at 3:00pm GMT. In February, Powell acknowledged the start of the disinflation process, but since then, data has come in hotter than expected.
The markets have priced in 25 bps for March, May and June. The market will listen for any hints on rate hikes and the terminal rate, but it is unlikely that he will push back much today. In the Fed minutes for the previous meeting, it said that "A few participants stated that they favoured raising the target range for the federal funds rate 50 basis points at this meeting." It will be interesting to hear if the Fed is open to 50bp in the future.
The hourly stochastic has made its way to its upper quintile (blue arrow). The longer it maintains this position, the better the chances of further USDOLLAR price appreciation.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.