The Federal Reserve delivered its first rate rise since 2023 and its updated dot plot points to one more increase by year-end. The move underpinned the USD in FX trading, while US equities and gold came under pressure. In the UK, the Bank of England decision is due in the late European session, with policy expected to be kept on hold and markets focused on whether forward guidance turns more hawkish.<\/p>\n
In Japan, the BoJ is expected to raise rates by 25 basis points as it weighs high oil prices and a weaker JPY against fragile growth, with USD\/JPY trading above 157.50 after breaking that level. Technical levels flagged include support at 155.00 and 152.10, while resistance is seen at 160.50 and 162.80. Oil eased after WTI failed at 101.00; key supports are 94.30 and 87.55, with resistance at 108.85 and 114.00. Data due include the Eurozone\u2019s final August HICP, Canada\u2019s September business barometer and August producer prices, plus US August building figures, weekly jobless claims and the September Philly Fed index, followed by Japan\u2019s August CPI and New Zealand\u2019s August trade data.<\/p>\n
With the Federal Reserve’s hawkish rate hike and another expected by year-end, we suggest derivative traders position for continued strength in the US Dollar. Historical trends show that when the Fed defies executive pressure, market volatility rises, supporting the greenback against major peers. Traders should consider long USD positions or shorting gold, which historically struggles as Treasury yields climb.<\/p>\n
We recommend watching the USD\/JPY pair closely as the Bank of Japan faces immense pressure to hike rates by 25 basis points. If the BoJ delivers a strong hawkish stance, it could push the pair below the 155.00 support level toward 152.10, reversing some of the Yen’s heavy losses. However, if the bank underdelivers, we expect buyers to quickly target the 160.50 resistance line.<\/p>\n
For those trading the British Pound, we see potential upside if the Bank of England holds rates but signals a hawkish path to curb inflation. With UK services inflation historically remaining sticky, any aggressive guidance could quickly strengthen GBP\/USD. We advise utilizing option strategies to capture this potential breakout while protecting against unexpected volatility.<\/p>\n
In the energy markets, we believe traders should shift to a range-bound bias after WTI crude failed to break the $101 resistance. Saudi Arabia’s move to supply more oil to Asia is helping ease supply fears, dragging prices down toward the $94.30 support level. We suggest using put options to target this lower boundary, keeping in mind that geopolitical risks could still trigger sudden spikes.<\/p>\n\n\n\n