Apple’s crisp results are a tasty treat for Wall Street

May Day holidays around the world, the upcoming Federal Open Market Committee policy statement and Fed Chair Powell’s press conference have FX markets spinning their wheels today. Those expecting a “non-event” FOMC meeting could be surprised. The prevailing wisdom suggests the Fed will “be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes”.

They won’t cave to Trump’s latest harangue, via Twitter, to lower rates. Nevertheless, the Fed is on record for stating that monetary policy decisions are “data dependent”. Most of the recent data that they depend on, has been on the strong side which not only muted chatter of a looming recession but could change the tone of the FOMC statement. If so, the US dollar will resume its uptrend.

The weaker than expected ISM Manufacturing Index (Actual 52.8 vs forecast 55.0) boosted EURUSD to 1.1243. A break above 1.1270 would shift the focus to 1.1360. A move below 1.1210 would target 1.1150.