COUNTDOWN TO FOMC
This week, the FED's interest rate decision, which will be announced on Wednesday, is the most important agenda of the week. FED President Powell's statements will also be carefully monitored at the FOMC press conference following the decision. The Fed is not expected to change its interest rate and asset purchase program in the markets, but the positive acceleration of macroeconomic data in the United States with the COVID-19 stimulus package has raised expectations that the Fed will reduce its asset purchase program sooner. This perception is heightened by the Bank of Canada's announcement last week that it would cut government bond purchases and start raising interest rates faster. In particular, the Fed, which has pledged not to raise interest rates until 2023, can be expected to signal at this meeting whether it sees any signs of recovery for the economy. Fed President Jerome Powell's letter to Senator Rick Scott on April 8 said the U.S. economy would temporarily see higher inflation as the recovery strengthened and supply restrictions pushed up prices in some sectors, but the Fed was determined to limit any overruns. Thus, we do not expect the overall scenario to change much in the markets if Fed President Powell, who shares that he is not nervous about the expected upward acceleration on the inflation side, reiterates his emphasis on fiscal support by not changing his stance on interest rates. However, if the Fed changes its bond purchase rate or interest rate projection in the meeting tomorrow, markets may experience sudden price movements.
If the FED takes a dovish stance and includes only its verbal rhetoric, the continuation of the dollar negative scenario could lead to continued upward trend in parity. Thus, with the support of returns from 1.2057 level in parity, rises can reach resistance levels of 1.21 and 1.2156. However, a strengthening movement may occur on the dollar side if it is announced that the asset purchase program will be reduced sooner with a possible recovery economy. In this case, the decreases can reach 1.20 support with a close below the level of 1.2057. Below this level, we gradually follow the support thresholds of 1.1958 and 1.19.
The normalization of U.S. 10-year bond yields could continue, along with a weak dollar scenario, if the Fed held a dove-ton meeting in line with expectations. Especially with the emphasis on inflation, we can see that the recovery in the precious metal is accelerating. In this context, the course of prices above the 1790 level is important. With the exceeding of this level, we follow the resistance levels of 1815 and 1836 in the rises that may occur in the precious metal. However, we will have 1745 and 1725 critical support crossing points for withdrawals that may occur due to a possible below-1765 level of mobility.
Increasing expressions of recovery in the economy with the incentive package cause the decreases to be limited on the Nasdaq side. In the index, which stretches the level of 13,840, it is seen that the returns from this level bring the prices above the 14,000 level. Depending on the occurrence of closing above this level in the index, the rises can target the resistance levels of 14.155 and 14.317. However, we are following a downward realization in the index, within the framework of 14,000 support, in case the Fed changes its bond purchase program. This below level close may lead dips to test the 13,840 and 13,650 support levels.