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Date: 16th September 2026.
Fed Rate Decision in Focus: GBP/USD, S&P 500, and Gold Outlook.
All eyes are on the Federal Reserve’s rate decision, while the Middle East and the AI slowdown take a back seat. Market participants are pricing in a rate hike of 0.25% which would be positive for the US Dollar but more or less negative for all other assets. However, a key element will be the Federal Reserve’s tone during the press conference.
The US Dollar Index rose to a two-week high this morning but has since lost momentum. Oil prices also continue to rise, putting further pressure for the Federal Reserve to continue hiking in the coming months. Lastly, Gold and equities continue to remain weak, but are not currently declining.
The Pound is not the worst-performing currency of the week nor the month, however, it is the worst-performing currency of the past 24 hours. If the Fed and the BoJ both hike and sound relatively hawkish, the GBP may become unattractive in the medium term.
Currently, the bond market is indicating a hawkish Federal Reserve, however, the Fed Chair is not likely to give concrete guidance. Nonetheless, his tone on inflation could become extremely influential. If the Federal Reserve seems willing to hike consecutively, the US Dollar could again find support and again rise above 100.000.
HFM - GBP/USD 30-Minute Chart
The GBP/USD on a 1-hour timeframe is forming a descending triangle pattern, which indicates low demand for the pound. In addition to this, the GBP/USD is trading below the key moving averages on most timeframes. In the past hour, the bearish momentum has continued to gain speed as UK inflation failed to rise above expectations. As a result, a pause from the Bank of England now appears more likely.
The VIX Index trades slightly lower during this morning’s session, providing a slight positive for equities. However, the put-to-all ratio continues to indicate that sellers remain active.
In the short medium term, tonight’s Fed decision and press conference are likely to be the main price drivers. Currently, 93% of investors believe the Fed will hike tonight, but only 43% believe it will hike in October. If the possibility of an October rate hike increases, the stock market could continue to come under strain. Sell signals are likely to strengthen significantly if the price falls below $7,591.65. At this price, 65% of the retracement would have been lost, shifting momentum back in favour of sellers.
However, in the short term, the bullish momentum from this morning is pushing the price above moving averages and the VWAP. Therefore, on certain timeframes, the indications are bullish. If the price falls back below $4,303, bullish signals will also fade on smaller timeframes.
HFM - Gold 30-Minute Chart
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Michalis Efthymiou
HFMarkets
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Fed Rate Decision in Focus: GBP/USD, S&P 500, and Gold Outlook.
All eyes are on the Federal Reserve’s rate decision, while the Middle East and the AI slowdown take a back seat. Market participants are pricing in a rate hike of 0.25% which would be positive for the US Dollar but more or less negative for all other assets. However, a key element will be the Federal Reserve’s tone during the press conference.
The US Dollar Index rose to a two-week high this morning but has since lost momentum. Oil prices also continue to rise, putting further pressure for the Federal Reserve to continue hiking in the coming months. Lastly, Gold and equities continue to remain weak, but are not currently declining.
GBP/USD - Markets Price In Fed Rate Hike
Of particular interest to traders who are looking to trade the Dollar long is the GBP/USD. The GBP is coming under pressure from the latest weak employment data and expectations of a Bank of England pause. The Bank of England will announce its rate decision on Thursday and is likely to be the only central bank among the ‘top four’ currencies not to hike this month. The European Central Bank adjusted rates by 0.25% last week, and markets expect the Fed and Bank of Japan to do the same this week.The Pound is not the worst-performing currency of the week nor the month, however, it is the worst-performing currency of the past 24 hours. If the Fed and the BoJ both hike and sound relatively hawkish, the GBP may become unattractive in the medium term.
Currently, the bond market is indicating a hawkish Federal Reserve, however, the Fed Chair is not likely to give concrete guidance. Nonetheless, his tone on inflation could become extremely influential. If the Federal Reserve seems willing to hike consecutively, the US Dollar could again find support and again rise above 100.000.
HFM - GBP/USD 30-Minute Chart
The GBP/USD on a 1-hour timeframe is forming a descending triangle pattern, which indicates low demand for the pound. In addition to this, the GBP/USD is trading below the key moving averages on most timeframes. In the past hour, the bearish momentum has continued to gain speed as UK inflation failed to rise above expectations. As a result, a pause from the Bank of England now appears more likely.
S&P 500 - Sellers Remain Active
The S&P 500 is experiencing impulse waves in both directions as there clearly seems to be a tug-of-war between buyers and sellers. Nonetheless, bearish impulse waves remain slightly larger than bullish ones. Currently, the stock market is under pressure from the possibility of an AI slowdown, higher oil prices, geopolitical tensions, US-Canadian tariffs, and the possibility of multiple rate hikes.The VIX Index trades slightly lower during this morning’s session, providing a slight positive for equities. However, the put-to-all ratio continues to indicate that sellers remain active.
In the short medium term, tonight’s Fed decision and press conference are likely to be the main price drivers. Currently, 93% of investors believe the Fed will hike tonight, but only 43% believe it will hike in October. If the possibility of an October rate hike increases, the stock market could continue to come under strain. Sell signals are likely to strengthen significantly if the price falls below $7,591.65. At this price, 65% of the retracement would have been lost, shifting momentum back in favour of sellers.
Gold Prices Spike Before Fed Decision
During this morning’s Asian session, Gold witnessed strong gains. However, volatility remains uncertain until the market obtains clarity from the Federal Reserve. However, Gold remains under pressure on certain timeframes despite attempting to rebound. With spot gold trading near $4,328 today, the immediate technical picture remains neutral to bearish while price stays below $4,360–$4,380. A sustained break above this resistance could open the door toward a more bullish outlook.However, in the short term, the bullish momentum from this morning is pushing the price above moving averages and the VWAP. Therefore, on certain timeframes, the indications are bullish. If the price falls back below $4,303, bullish signals will also fade on smaller timeframes.
HFM - Gold 30-Minute Chart
Key Takeaway:
- Markets are focused on the Federal Reserve’s rate decision and guidance on future hikes.
- The US Dollar remains supported, while GBP/USD faces pressure from weaker UK fundamentals.
- The S&P 500 remains vulnerable as sellers stay active ahead of the Fed announcement.
- Gold is attempting to recover, but remains below key resistance levels in the short term.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Michalis Efthymiou
HFMarkets
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
