FOMC and Market Reactions – Simple Logic Explained

💎MJTrading:
The Federal Open Market Committee (FOMC) guides U.S. interest rates. Their decisions ripple through all major markets, not just the dollar.

🔑 How It Works (Simple View):
- When the Fed signals higher rates, the USD demand rises (investors seek higher returns), while gold, stocks, and crypto often fall because money becomes “more expensive.”
- When the Fed signals lower rates or slows tightening, the USD loses demand, and money flows into assets like gold, stocks, and crypto.

🔍 Why a Rate Cut Weakens the Dollar:
* Cutting rates means borrowing money becomes cheaper.
* Investors earn less return by holding USD in banks or bonds.
* This lowers demand for the dollar, making it cheaper in global markets.

📊 What the Current Charts Show:
DXY (Dollar Index): Sharp drop → less demand for USD.
XAUUSD (Gold): Demand rises as an alternative store of value.
EURUSD : Euro strengthens against weaker dollar.
BTCUSD : Risk appetite returns, lifting crypto.
US30 (Dow Jones): Stocks benefit as liquidity shifts from USD into equities.

⚡ The Core Reason – Demand & Supply
Weaker dollar = reduced demand for USD, so supply flows into gold, stocks, euro, and crypto.

🔮 Looking Ahead – Will the Rally Continue?
The rally may extend if the dollar remains under pressure and the Fed stays dovish.
But caution: after the first strong impulse, markets often retrace to test demand zones before continuing.
Next week’s momentum will depend on whether buyers can sustain demand beyond the initial FOMC reaction.

👉 Takeaway for Traders:
FOMC moves aren’t random. They’re driven by where capital finds the best return. Understanding this demand–supply flow helps explain why all charts move together in these moments.

#MJTrading
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