What Are Bond Markets Indicating Ahead of Fed Taper? – Forex Anatomy

What Are Bond Markets Indicating Ahead of Fed Taper?

The first week of November will be rolling in with some major risk events that may have a profound effect on market sentiment for the remainder of the year. 

The month of October ended with a resurgence of bids in support of the US Dollar, as month-end rebalancing flows, and the dollar’s technical landscape preferred more upside for the buck. However, dollar sentiment has reversed lower on this Monday Trading Session, in confluence with US Treasury yields, as both instruments attempt to “cool down” or stabilize ahead of Wednesday’s Federal Reserve Monetary Policy Statement, in which markets expect the Fed to announce a $15 billion taper each month to close out their QE program.

Central Banks around the world, are being forced by bond market participants to adopt a more hawkish stance on rates, as inflation concerns grow, and economic expansion slows down. For today’s webinar, we discussed the details surrounding the RBA Monetary Policy Announcement, which is scheduled to be released during the Asian Trading Session, as well as what to expect from the FOMC’s Taper announcement on Wednesday.

For a good portion of today’s webinar, we looked to the charts to analyze price action in GBP/CHF, GBP/CAD. EUR/GBP, AUD/CAD, and GBP/NZD to identify technical setups that could be forming for trade entry over the next few sessions. We also briefly reviewed the concept of a “3-Wave” Pullback and why learning how to identify this technical pattern is essential for any success in your day trading endeavors.

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About the Author Marvin Perry

Marvin Perry has been an active trader within the Forex market since 2010. He attended the University of Illinois in Urbana/Champaign, and graduated in 2002 with a double major in Cell and Structural Biology and Chemistry. He currently serves as an FX instructor & Quantitative Analyst for the Forex Anatomy Private Trading Community called "The Lab", where he conducts live weekly trading webinars & instruction on Fundamental Analysis & Inter-Market Interpretations of dynamic asset classes and their influence on currencies.

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