US 500, USDCAD, GBPUSD

Fed rate decision → US 500 Index

The Federal Reserve is expected to announce its first rate cut of 2025 during its September 16–17 meeting, lowering the federal funds rate by 25 basis points to a range of 4.00%–4.25%. This move comes amid signs of labor market weakness, including stagnant job growth and rising unemployment, while inflation remains elevated at 2.9%. The Fed appears to be prioritizing economic support over inflation control, and markets have largely priced in this cut, with expectations for further easing later in the year. Investors will focus on Chair Powell’s post-meeting remarks for guidance on the pace and scope of future rate adjustments.

The US 500 index recently surged to a record high of 6,600, breaking above the upper boundary of its ascending channel and confirming strong bullish momentum. Technical indicators such as the RSI and stochastics support further upside, with potential resistance at 6,700, 6,800, and the 161.8% Fibonacci extension at 7,000. However, a drop below the 6,508 support level could trigger a correction toward the short-term uptrend line near 6,450.

BoC meeting → USDCAD

The Bank of Canada is expected to cut its benchmark interest rate by 25 basis points to 2.5% at its September 17 meeting, responding to deteriorating economic conditions. August saw a loss of 22,000 jobs and a rise in unemployment above 7%, while Q2 GDP contracted by 1.6% annualized. These developments have led economists to forecast not only this cut but another in October. A more dovish tone from the BoC could accelerate the Canadian dollar’s decline, especially if policymakers signal a prolonged easing cycle.

USDCAD is trading above its short-term SMAs but faces strong resistance around the 1.3890–1.3920 zone. A successful breakout could pave the way for a test of the 200-day SMA at 1.4020. Traders should remain cautious, as the BoC’s tone and forward guidance could significantly influence near-term price action.

BoE decision → GBPUSD

The Bank of England is expected to maintain its policy rate at 4% during its September 18 meeting, following a narrow 5–4 vote to cut rates in August. Inflation remains persistently high, with July’s CPI at 3.8%, nearly double the BoE’s 2% target. Governor Andrew Bailey has expressed uncertainty about the timing of future rate cuts, suggesting a more cautious approach. While no change is anticipated this week, the voting breakdown could be pivotal, any dissent in favor of easing may prompt markets to bring forward rate cut expectations, potentially weakening the pound. Current market pricing suggests the next cut may come in early 2026.

GBPUSD is hovering near the 1.3585 resistance and the upper Bollinger band, having traded within a tight 1.3370–1.3585 range over the past month. The narrowing of the Bollinger bands indicates a potential breakout. A move above 1.3585 could target the four-year high at 1.3788, while a drop below 1.3370, the 23.6% Fibonacci retracement of the 1.2100–1.3788 rally, could signal downside risk.