FOMC meeting stands as the most important of the four to be held this week

We have ahead a new week full of events capable to arrange markets to other principles. So far, the EURUSD currency pair was driven down by the large-scale quantitative easing program of the ECB. The EURUSD is currently trading at 1.0500 and is strongly attracted by the parity. Starting today and until Wednesday the most traded currency pair (EURUSD) may react under the pressure of the American dollar as the FOMC will announce the funds rate while, in the press conference, an interest rate hike for the dollar could be stated. The EURUSD could go down further, but movements against the dollar are not impossible.

Another important event of the week will be on Wednesday, when the MPC Official Bank Rate Votes in Great Britain will be published. Changes are not expected, but the market could react under the pressure of the Mark Carney’s speech last week. He declared that the inflation could go below zero this year, so the central bank may react. GBPUSD was also driven down to 1.4695 by political tensions in the United Kingdom and by the financial problems of the European Union. A correction up to 1.4850 may come as a natural reaction of the market, which is characterized by a strong bearish trend.

Later today ECB President Mario Draghi is scheduled to speak in Frankfurt. A high market volatility is expected if he does not choose to refrain from monetary policy discussions. As last time his speech wounded the euro, this time the currency may have an anticipatory reaction.

On Thursday the SNB Monetary Policy Assessment together with the Labor Rate decision will broadly influence the swiss franc. Looking at the EURCHF currency pair price chart, we may observe the battle of the SNB with the depreciation of the euro. This scenario has led to speculations about a further interest rate cut to -1.5%. The markets may have a negative anticipatory reaction as the credibility of the SNB decreased considerably.

Meanwhile the WTI oil market is being suffocated by the US’ supply which threatens to lower further the prices. Even if expectations lean towards a declining demand in the second half of the year due to the restriction of activity, markets do not rely with confidence on this scenario. A report from IEA warns that the surplus continues to accumulate in order to be sold when prices recover. The filled oil tanks from Cushing are representing now the biggest threat and now only a closure of the production capacity in the US could stop the general downward trend.