Forex Strategy: Mixed FOMC Forecasts Prevent Dollar Breakouts

By DailyFx | Updated July 30, 2014 AAA

DailyFX.com -

Talking Points:

• The FOMC Tapered as expected, but the economic and rate forecasts were mixed

• Majors like EURUSD and GBPUSD were ready for a clear read to force a specific directional break

• The Fed is still on track to outpace the ECB, BOJ and RBA with hikes; but the dollar is emboldened

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Watch the recording of John Kicklighter's coverage of the FX market's reaction to FOMC rate decision. An unspoken role of central banks is to curb market and exchange rate volatility that may arise from their policy efforts. On that front, The Fed and Chairwoman Janet Yellen were quite successful. Though the lean towards the wind down in QE and eventual return to rate hikes remains in place, the market was slow to respond to the event. Meeting expectations now leaves the dollar and markets in a precarious position with high-level technical potential without a clear catalyst.

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