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Fed Day Play In The EUR/CAD
Welcome to Fed Day trade! The US Federal Reserve is due out with its latest interest rate announcement at 2:00 PM EST. If you’re in the markets, brace for volatility around this release. We’ll have all the coverage at FOMC Live beginning at 2:20 PM EST. Check this link out to join the action! https://www.youtube.com/@switchmarkets/streams At press time, the CME FedWatch Index projects there to be an 89.6% chance of a 25 basis point rate cut from the Fed. That means the Federal Funds Rate will be reduced from 3.75-4.00% to 3.50-3.75%. However, the devil will be in the details as Jerome Powell takes center stage for the final time in 2025. Many analysts anticipate a hawkish tone from Powell, citing persistent inflation as the primary risk facing the US economy. No matter what Powell says, the markets will be active during his 2:30 PM EST presser!
In other news, the Bank of Canada (BoC) elected to hold the Canadian prime rate static at 2.25%. The release brought modest participation to the Loonie. Here’s a short-term level worth watching in the EUR/CAD:
Daily 38% Fibonacci Retracement, 1.6161
Anytime the US Fed is due to speak, it’s a good idea to consider assets that minimize exposure to the USD. The EUR/CAD is a prime candidate today, offering a solid diversification opportunity. Check out our Key Levels for more information on this Trade Idea.
Have a great Fed Day, and we’ll see you at FOMC Live!
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