Forex Market News

Thursday was another interesting day on the market, with high volatility and promising opportunities. We also got two rate decisions and both of them were rises. The Swiss National Bank hiked the rates by 50bp to 1.5%, despite the Credit Suisse crisis. A few hours later, the Bank of England hiked by 25bp to 4.25%, which was a response to the latest surprising hike in inflation.

Yesterday, the FED hiked rates by another 25bp, lifting them to the round level of 5%. The increase itself was not the most important event yesterday; traders shifted their attention towards the statement and press conference. Jerome Powell was slightly dovish this time, confirming that hikes are nearing the end. The FOMC claimed that future increases are not certain and that they will be data-dependent.

Today, we're anticipating a 25 basis point (bp) interest rate increase from the FED, instead of the previously speculated 50 bp hike. It's unlikely that the FED will pause, as that would suggest serious issues in the banking sector, and the FED's reluctance to worsen the situation. We'll also receive the economic projections, statement, and press conference from the FOMC today. As always, expect high volatility in the market, so if you're not comfortable with that, it's better to stay without a position.

The recent days have been a paradise for the short-term scalpers trading the increased intraday volatility with the price going in both directions. Yesterday, we experienced a great comeback to the risk ON mode on almost every asset on the market. No new bank collapsed or was bailed out, which is great news, right?

The weekends are usually rather quiet on the market, but it was not the case this time. On Sunday, we learned that UBS is buying Credit Suisse for $ 3,2 billion, with the SNB providing an additional loan of up to $108 billion to support the takeover. Shortly afterwards, we received a joint statement from Janet Yellen and Jerome Powell: “We welcome the announcements by the Swiss authorities today to support financial stability. The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient. We have been in close contact with our international counterparts to support their implementation.” The party in the banking sector does not stop!

On Thursday, we finally saw a proper bullish reversal on indices, with the SP500 climbing above the downtrend line, the DAX bouncing off the 14800 support, and the Dow Jones forming a bullish engulfing pattern on the daily chart. This is great news for buyers.