Economic calendar: FOMC decision in the spotlight

Summary:
- UK price growth expected to stay unchanged in February
- API estimates hint at large drop in oil inventories
- FOMC to release update economic forecast today

The UK inflation data is scheduled for release in the morning therefore GBP may enjoy elevated volatility. Oil traders will watch DOE report carefully as yesterday’s API data showed noticeable draw in inventories. However, the key point in today’s calendar is FOMC decision and Jerome Powell press conference. USD as well as other assets are likely to enjoy abnormal price swings in the evening hours so traders beware!

9:30 am GMT - UK, Inflation report for February. The UK Prime Minister is set to meet with the EU leaders later this week to discuss long extension to the Brexit deadline after the third meaningful Brexit vote was cancelled. Meanwhile, the UK Office for National Statistics will release price growth data for February. Both headline and core CPI measures are expected to stay unchanged at 1.8% YoY and 1.9% YoY respectively. In case actual data shows faster pace of price growth GBP may get supported but one should be aware that any revelations in Brexit case may cause any price gains to be quickly erased.

2:30 pm GMT - DOE report on oil inventories. Rally on the oil market eased as lack of news concerning trade deal between China and the United States caused uncertainty over the future of the global economy to rise. API estimates released yesterday showed a bigger-than-expected drop in inventories but it was not enough to trigger decisive upward move on Brent (OIL) and WTI (OIL.WTI). DOE data is more closely watched therefore confirmation of a drop today could actually push prices higher.

6:00 pm GMT - US, FOMC interest rate decision. The Federal Reserve is unlikely to change level of interest rates today. However, updated macroeconomic projections will be released as well as a dot-plot. Dots from December’s meeting showed that Fed plans to raise interest rates twice this year and once in 2020. Nevertheless, inflation slowed and surveyed gauges deteriorated since and one cannot rule out that the US central bankers decide to lower their forecasts. Press conference of Jerome Powell will start half an hour after decision announcement (6:30 pm GMT).

GBPUSD began to trade sideways in the vicinity of the key resistance zone as outlook on Brexit became somewhat more blurred. Outcome of Brexit talks with EU leaders and FOMC decision are likely to be decisive for the pair this week. In case a longer downward move occurs price may find support at the 50-session moving average (green line) and upward sloping trendline, both in the vicinity of 23.6% Fibo level (1.3080) of the downward move started in mid-April 2018. Source: xStation5

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