Federal monetary policymakers will meet again on the evening of Wednesday, February 1, 2023, at 10:00 to determine the levels of new interest rates, with great
expectations for an additional 25 basis point increase, to reach the range of 4.75%, but what the markets are most concerned with is knowing the range of interest
rates which the Fed considers sufficient to bring inflation back towards the 2% target.
We are also awaiting the release of many important economic data, including:
- US jobs data released by ADP
- Business index for the manufacturing sector
- The number of vacancies issued by the US Department of Labor
The interest rate announcement will follow the Federal Reserve Chairman's press conference and will be of great importance in which we will monitor whether the
Fed will be decisive and end the debate about the final interest rates, or at least know when the cycle of raising interest rates may have come to an end, and
therefore it will be influencing the movement of the markets.
It will be difficult to build expectations for price movement coinciding with the announcement of interest rates as well as during the press conference because that
depends on the terminology that the Federal Reserve Chairman will use in the press conference, but what is expected is that the Federal Reserve will leave the
door
open to all expected possibilities especially since inflation despite its continued slowdown is still at high levels.
Therefore, the markets expect new fluctuations in prices, ups, and downs, and it will take some time before they start to stabilize and take a specific path. and we
must note and remember the golden rule: the markets have different ideas and convictions in the way they interpret the information issued, and therefore prices
cannot move 100% according to that. the information.
Analysts advise when the news is released:
- Monitoring open positions for the possibility of price fluctuation throughout the day without excluding any surprises of price movement, which requires extraordinary attention.
- Relying on the main support and resistance levels to follow the price movements by using the chart within a daily time frame and not relying on the intraday support and resistance levels.
The markets expect that the use of terms by the Fed indicating the continuation of the tightening policy may constitute support for the dollar and negative for
stocks, metals, and other currencies, but any hints indicating the imminent end of the monetary tightening cycle may be in favor of stocks and metals, and at the
same time negative for the dollar.
The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.