Today's Key Events

Market Overview

U.S. Core retail sales appeared lower than usual at 0.1%, while overall Retail sales appeared at 0.1%, better than the expected -0.2% but worse than last month's release at 1.1%.

This weakness in Core retail sales pushed market expectations for a 50 bps rate cut up, despite better than expected PPI and CPI release from last week.

Traders are still betting on a 63% probability that the Fed will cut rates by 50 basis points on Wednesday and a 37% probability of a 25 basis-point cut, according to CME Group's FedWatch tool.

Market Analysis

GOLD - GOLD corrected to expected levels. Currently, it was denied and was supported by the lower boundary of the S&D zone. We wait for further confirmation to identify where the FOMC rate cut will take this market. However, we do expect further buying to occur and depending on how largely they will cut rates, we may expect to see an aggressive push upward.

SILVER - SILVER has stayed consolidated on 30.668. Further consolidation or drop is expected before the rate cut decision comes later. We wait for news and watch how the market will progress.

DXY - The US Dollar is expected to drop later after FOMC calls for the rate cut. However, we see that there is a steep resistance against the low as price recovers back into the higher S&D zone. Despite this, we see the market gap lower. Market expectation for this remains on the low. 

GBPUSD - The pound finds resistance at major level 1.32301. We expect further buying in this market as evident higher highs and lows are being made. With the upcoming rate cut, dollar drop in the near-term is expected. A 25 bps may push prices up further, but a 50 bps may pull price down in the long run. The same logic applies for all other pairs against the dollar.

AUDUSD - The Aussie dollar finds strength, supported by 0.67531. Buying is happening ahead of the FOMC statement, highlighting the Aussie strength against the dollar. However, we expect consolidation until announcements later, or a rise toward 0.67985.

NZDUSD - Similar to the Aussie Dollar, we see aggressive buying in the market. However, we can clearly tell the resistance at 0.62086 holding firmly against the Kiwi. If price breaks above said level, we may see further buying to occur–holding up to market expectations. Although our expectations remain on the consolidated side.

EURUSD - The Euro is expected to rise further, but drop in the short run. Currently, prices are on 1.11386. We wait for further price trading for more confirmation.

USDJPY - The Yen will have a different approach to rate cuts. If a 25 bps cut happens, there will be more strength for the dollar, and it will pull prices down as risk-on assets will have more value in these markets. If a 50 bps cut occurs, the yen will gain more strength as a safe-haven asset.

USDCHF - The Franc remains consolidated, gaining against the dollar in a range within 0.85541 and 0.84086. We expect further selling to come into the market, but wait for more confirmations. Similar to the Yen, Franc will display similar reactions to the USD after the FOMC statement as a safe-haven asset.

USDCAD - The Loonie remains consolidated despite USD weakness being shown. Still no progress in this market, we wait for further confirmation.