Tools for Traders Top Movers | Heat Map | Pivot Point | Pivot Meters | Action Bias | Volatility Charts Action Insight Daily Report: Dollar Pressured after FOMC, Sterling Strong ahead of BoE Dollar stays broadly pressured today as post FOMC selloff extends. While Fed delivered the widely anticipated rate hike, it maintained the forecast of a total of three hikes in 2018 only, not four. Aussie is the only failing to join the party against Dollar today after weaker than expected job data. Sterling remains the strongest major currency for the week even though it turns slightly cautious against Euro and Yen today. BoE rate decision is the main event to watch and any hawkish twist in the announcement would propel Sterling further higher. In addition, Eurozone will release PMIs and German Ifo. US President Donald Trump will also finally announce his tariffs against China. FOMC Projects Two More Rate Hikes This Year, Followed By Three In 2019 FOMC's rate hike of +25 bps is not news. What caught market attention the most was the median dot plot (which continued to project 3 rate hikes in 2018) and the upgrades in the economic projections. US dollar plunged from almost a three-week highe after the announcement. The message delivered in the accompanying statement and by Fed Chair Powell at the press conference was not as hawkish as some had expected. Powell indicated he was not concerned about an overheating economy despite higher fiscal spending. Rather, he added that trade policies have become a rising concerns among policymakers. UK And EU Reached Transition Deal, Erasing Key Uncertainty Of BOE's Rate Hike Path Despite initial rally following the announcement of a Brexit transition deal, British pound has retraced much of its gains. Both UK and EU officials have hailed the agreement. While UK's Brexit negotiator Davis David noted that the deal contains 'a large part of what will make up an international agreement for the ordered withdrawal of the UK', EU's representative Michel Barnier indicated that it marks "decisive step" towards to eventual agreement of the UK-EU relations after Brexit. Yet, the terms of transition agreement reveal that the UK has backed down on various fronts. Technical Outlook GBP/USD Daily Outlook Daily Pivots: (S1) 1.3964; (P) 1.4015; (R1) 1.4048; More.... GBP/USD's rally resumed after brief retreat and reaches as high as 1.4169 so far. The break of 1.4144 resistance should confirm our bullish view that correction from 1.4345 has completed at 1.3711 already. Intraday bias is now on the upside for 1.4345 high next. Break will resume larger up trend to 61.8% projection of 1.3038 to 1.4345 from 1.3711 at 1.4519 first. On the downside, break of 1.3982 support is needed to signal completion of the rise from 1.3711. Otherwise, outlook will remain cautiously bullish in case of retreat. Suggested Readings Why The Dollar Sank On The Fed Increasingly Confident Fed Raises Rates, and Growth Forecasts Can GBP/JPY Continue Trading Higher? FOMC Review: Only Slightly Steeper Rate Path Due To Trumponomics Fed Recap: Dollar Sinks Despite Higher Fed Forecasts The Fed Remains Resolute, Even in the Face of Softer Data FOMC Raises the Fed Funds Rate to 1-1/2 to 1-3/4 Will BoE Lay the Foundations For May Rate Hike? Brexit Transition Deal Gives BoE Go-Ahead For May Rate Hike But UK Data Poses Dilemma Economic Data
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