Tuesday Plan: I will be focusing on FOMC Interest Rate announcement, as it is one of the most volatile events. My plan is actually to wait for the announcement and try to decipher the statement. Therefore, if FOMC is hawkish, I will sell EUR/USD and BUY GBP/JPY, if FOMC is dovish, I will buy EUR/USD.
My research on this particular announcement yielded that FOMC will leave interest rate unchanged. There are no expectations of a surprise hike and no particular inclination to hawkish or dovish statements. Therefore my decision to wait and see is justified. Furthermore, Fed Fund Futures shows almost a 0% of a rate hike. Do a search on Google for Fed Fund Future; you’ll see the following graph:
It shows that the upcoming September Rate decision, at present moment, has a 65% chance of 2.00% (unchanged), and 20% for 2.25% (hike), 10% for 1.75% (cut).
Result: FOMC decided to leave rates unchanged as expected. Accompanied statement was not extremely hawkish, lots of uncertainty and therefore no trade. Future outlook on the US Dollar is still moderate bullish for the time being.