As expected the market was somewhat reserved ahead of the FED meeting. The reason for the reservation was twofold first of all we had the head of the FED come out and suggest that we’re going to have a press conference after yesterday’s meeting. Now the significance of that was that the US generally only raised interest rates when there’s a press conference afterwards.
So that kind of indicated that there would be an interest rate hike yesterday and that’s what we got.
Second of all he then I suppose realized his possible error and maybe lead in the market forward that they would then hold the press conference after every meeting.
The significance of that means that almost every meeting from here until the end of the year is in play.
That suggested that we’re expecting three rate hikes and possibly four as that was also emphasized in last night’s meeting so as expected we got exactly that on the eurodollar.
The dollar initially strengthened before giving up its gains and we find ourselves at the resistance level of 1820 to 1850.
My idea today is to stay out of the euro at least this evening reason being as we’ve got the ECB announcement today.
The ECB have indicated over the last couple of weeks that they would contemplate tapering off the QE which of course would strengthen the euro so I’m gonna sit there till after that meeting. I’d like to see what happens in that meeting first before looking at the chart again.
Now Cable for me looks a much better trade cause I think this 1.3430 1.3440 is still a key level for me I can see resistance there. I do you think that’s we will get some sellers come into the market.