Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Post-FOMC moves spark volatility in EUR/USD, GBP/USD and USD/JPY

Initial USD weakness in the wake of the Fed meeting has given way to a recovery for the greenback, prompting price gyrations in key FX pairs.

EUR/USD stuck below $1.20

A close above $1.20 still eludes the EUR/USD pair, which is struggling to make headway despite the rally from last week’s lows. A more bullish view requires a break above this level, opening the path to trendline resistance from the January high, likely around $1.21.

With rising stochastics and a potential bullish moving average convergence divergence (MACD) crossover the longer-term uptrend may well have been revived, with a more bearish view requiring a reversal back below $1.19 at the least.

GBP/USD recovering in wake of FOMC

The past two sessions have seen a strong recovery that has arguably revived the uptrend. The 50-day simple moving average (SMA) at ($1.3813) remains untested once again, but with a higher low now in play a move back towards $1.42 and the latest higher high seems likely.

Sellers were unable to drive the price below $1.38, leaving the buyers to dictate the move, and with a weakening of the US dollar in the wake of the Federal Open Market Committee (FOMC) meeting the way seems clear for further upside.

USD/JPY fights to hold gains

The USD/JPY pair continues to grudgingly give back some of its gains, but we have seen four days where the price has ended well off the highs but firmly above the lows, a sign of how closely-fought these moves have been.

The trend change from earlier in the year remains intact, so even a bigger drop towards ¥107 would not necessarily change the overall outlook, but it might be time for USD/JPY to finally see a move to the downside after the huge gains of January and February.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.8 pips on EUR/USD
  • Analyze market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on the most popular forex markets


Prices above are subject to our website terms and agreements. Prices are indicative only

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading forex provider.

Stay on top of upcoming market-moving events with our customisable economic calendar.