FOMC Minutes

June’s FOMC Minutes: Recap & Highlights

Posted Wednesday, July 1, 2020 by
Shain Vernier • 2 min read

It’s been a quiet open to July on Wall Street, with traders electing to take it easy ahead of June’s FOMC Minutes release. Now that the report has hit newswires, the DJIA DOW (+18), S&P 500 SPX (+19), and NASDAQ (+93) are trading to the positive. Once again, the NASDAQ is setting the pace as investors go long big tech and growth stocks.

June’s FOMC Minutes Are Out….

Over the past four months, central bank heads have been extremely vocal about monetary policy. For seemingly weeks now, FED Chairman Jerome Powell has emphasized that COVID-19 continues to inject huge uncertainty into any economic recovery. Today’s FOMC Minutes echoed this sentiment. Here are a few highlights from the release:

  • “Members decided to maintain the Federal Funds Target Rate at 0-0.25%.”
  • “The target rate is to be maintained until confident that the economy had weathered recent events.”
  • “To support the flow of credit to households and businesses, members agreed that over the coming months it would be appropriate for the FED to increase its holdings of Treasury securities.”
  • “Available information suggests that U.S. Real GDP would likely post a historic Q2 decline.”
  • “Future performance of the economy will depend upon the evolution of the coronavirus outbreak.”

In short, the FED is holding policy static and not concerned about inflation. So, for the time being, economic uncertainty is palpable and QE 2020 is being extended into the distant future.

GBP/USD On The Bull

In a Live Market Update from yesterday, I issued a scalping recommendation for the GBP/USD. The trade was a success, generating a fast 12 pips profit from just beneath the 1.2400 level. Now, rates have broken above 1.2400 and are on the bull.

FOMC Minutes
GBP/USD, Weekly Chart

As of this writing, there are three technical levels worth watching in the GBP/USD:

  • Resistance(1): Psyche Barrier, 1.2500
  • Resistance(2): Bollinger MP, 1.2546
  • Support(1): Weekly SMA, 1.2406

Overview: This week has been a challenging one for forex traders. Today brought the onset of July and FOMC Minutes; Thursday brings Non-Farm Payrolls, and U.S. markets are closed Friday. Barring a major surprise uptick in Non-Farm Payrolls, the USD will very likely close the week down vs the majors.

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