Trading Week Ahead: Will the FOMC Hold Rates or Signal a Shift?

Prepare for one of the most pivotal weeks for financial markets this June. Investors will be closely monitoring the Federal Reserve’s interest rate decision, Chair Jerome Powell’s press conference, and the US retail sales data. These events could significantly shift expectations regarding future monetary policy adjustments. Read on for a comprehensive breakdown of how these events might impact the US dollar, bond yields, and equity markets.

FOMC Statement & Powell’s Press Conference
Markets are set to focus on Wednesday evening’s FOMC announcement, where interest rates are widely expected to remain unchanged. However, attention will likely shift to the updated economic projections and the Fed’s tone. If Chair Powell signals openness to easing policy, it could trigger a dovish reaction, weakening the dollar and lifting risk assets. Conversely, continued emphasis on patience and economic resilience may lift Treasury yields and support the greenback.

US Retail Sales
Retail sales data for May will be released a day before the Fed’s meeting, with a forecast of +0.1%, matching the previous month’s print. As a key gauge of consumer strength, any unexpected deviation in this report could swiftly influence rate expectations. Weaker results would bolster dovish bets, while stronger numbers may strengthen the dollar and reinforce the case for holding rates steady.

Unemployment Claims
Weekly jobless claims remain a reliable barometer of US labour market health. With the FOMC meeting approaching, every data point will be scrutinised. An uptick in claims could indicate a cooling labour market, thereby increasing pressure for policy easing. On the other hand, a stronger-than-expected figure would likely support the Fed’s patient stance.

*All times in the table are in GMT+2

Technical Analysis with FVG Strategy

This trading strategy utilises the 20- and 50-period Exponential Moving Averages (EMAs) to gauge directional bias, while the Fair Value Gap (FVG) serves as a tool to identify zones of price imbalance. These gaps, typically formed during impulsive price movements, often represent high-probability zones for entries or exits. The strategy is well-suited for assets such as EURUSD, GBPJPY, US30, and XAUUSD, providing a structured view of recent price action and highlighting potential trade opportunities.

Weekly Market Outlook

GBPJPY

Market Context: GBPJPY remains within a bullish structure despite the lack of significant movement in recent sessions. Friday’s rejection off the 20 EMA confirms ongoing demand on dips.

Preferred Scenario: A clean break above swing highs near resistance would confirm bullish intent, opening the path toward the upper FVG zone.

Alternative Scenario: If resistance continues to hold, a rejection could drive the price lower to sweep liquidity below recent lows.

Setup: No valid FVG setups have formed over the past two weeks. Price action around resistance should be monitored closely for confirmation.

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US30

Market Context: The Dow Jones faced a sharp sell-off following Friday’s geopolitical developments. Price has since stabilised near the 20 and 50-day EMAs, now acting as immediate support.

Preferred Scenario: A continued move lower remains the preferred view, targeting liquidity resting beneath recent swing lows.

Alternative Scenario: If buyers step in at current support, a retracement higher could develop, though a structural shift would be required to flip bias back to bullish.

Setup: No FVG setup has been formed this week or last. Price action around resistance is crucial for determining directional intent.

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Opportunities to Watch This Week

EURUSD

Market Context: EURUSD continues to trade firmly within a bullish trend structure, holding above the 20 and 50-day EMAs. Last week’s breakout above the yearly high established a bullish Fair Value Gap (FVG), reinforcing underlying upward momentum.

Preferred Scenario: A continuation higher remains the base case, with price action likely to push into new highs as bullish order flow persists.

Alternative Scenario: A short-term liquidity sweep below recent lower lows may unfold before buyers step back in, providing a more favourable long entry.

Setup: The recent bullish FVG presents a solid long setup, with upside targets aligned to a 2:1 RRR or a retest of the recent high.

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XAUUSD

Market Context: Gold has broken out of consolidation with a strong bullish move, now targeting a potential run to a new all-time high. The structure remains technically supportive of further upside.

Preferred Scenario: The bullish leg is expected to extend, with momentum likely to carry price into a new all-time high.

Alternative Scenario: A correction back to the 20 EMA could play out, offering a dip-buying opportunity if the trend remains intact.

Setup: A fresh bullish FVG provides a valid long setup, with targets aimed at a 2:1 RRR or a full extension to the new all-time high.

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