The FOMC Day

Outlook 05/02: The FOMC will likely hold interest rates steady this afternoon after concluding a two-day monetary policy meeting, but is expected to hint to lifting borrowing costs in June on the back of rising inflation and low unemployment. Investors have also priced out the chance of a hike, given the central bank's adherence in recent years to only raising rates at meetings that are followed by press conferences.

/ESM8 Value: YVAH 2643 YPOC 2630 YVAL 2627

/ES Plan: Yesterday market closed balanced and overnight profile shows bullish profile (GBT 2665), moving above Yesterday's value, so we've these options:

A) If market remains above LVN 2649 with bullish internals, be a buyer leaning on 2649-2651 towards ONH 2658.50 GBT-LVN 2666 and LVN 2678. 'Look below and fail' is a signal of strength.

B) If market starts to move below LVN 2649 with bearish internals, become a seller leaning on 2649 towards YVAH 2643 HVE 2635 and YVAL 2627. 'Look above and fail' is a signal of weakness.

Tips: FOMC days are unique events that call for increased attention and a shift in tactics. It’s best to treat FOMC days as two separate sessions. The time before the announcement, which tends to involve a tightening price range and lower activity, which gives way to a sudden burst of volatility that continues into the close. Trade setups that work well in the morning session may fail completely in the afternoon session, resulting in significant losses.

Today's Economic Calendar

10:30 EIA Petroleum Inventories
02:00 PM FOMC Announcement

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

Questions? Just ask via email or twitter @verniman direct message.