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Hardy: Will central banks offer relief after rough start to 2016?

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It's a big week for FX traders with both the FOMC and Bank of Japan scheduled to meet. Saxo Bank's John Hardy looks at what to expect and whether markets will get some relief from monetary policy makers after a rough start to the year.

The US Federal Open Market Committee meets on January 27 and after the turbulent start to the year, the market is now only pricing in one full rate hike for the rest of 2016. But according to Hardy, there is a chance they could be forced to readjust their expectations.

The Reserve Bank of New Zealand meets on January 28, a meeting Hardy describes as key after fourth quarter inflation data came in very weak, which may force the RNBZ to downgrade its guidance. He also outlines what to expect from the BOJ meeting on January 28-29.

Hardy sets out his trading strategy and says the direction of EURUSD will very much depend on the market's appetite for risk and whether the FOMC takes traders by surprise.