Nordea Research discusses the USD tactical outlook around FOMC policy meeting.

"Most focus this week will be given to the FOMC meeting, as the market will be looking for signs on how, when and if the quantitative tightening will end. We judge that the current consensus expects the Fed to end QT by Q4-2019. Any hints on an earlier exit from the QT programme will give our slightly positive EUR/USD view a boost. Market sentiment has brightened and the FOMC may decide to keep the announcement of QT details for a rainy day, but details could also be announced as early as next week. Our baseline remains QT tapering starting in Q3 and ending in Q4 with excess reserves around 1.000bn. It will be negative if the Fed announces that excess reserves will continue to fall after the end of QT," Nordea adds.