- The Fed left interest rates and their dot plot unchanged, and said in October they are to reduce their balance sheet, this signals one more hike this year.
- Due to the recent soft patch in inflation, this may have come as a surprise for investors. Now the prospect of another hike in December boosted to 70%.
- As the markets absorb a “hawkish” Fed, we believe the USD will remain under buying interest.
- Gold dropped on the news, this came after it tested 1315(R2) and managing to break 1300(R1). If the sellers remain in charge it could possibly push the price below 1292(S1).
BoJ repeats the same tune
- Bank of Japan also kept its policy unchanged, as well as giving out no clues to whether to change their loose framework soon. Amid a very risk-on environment, we see the Yen staying on the back foot.
- Following the Fed’s decision yesterday the USD/JPY surged, then rebounded from 111.00(S3) and now trading above 112.20(S1). If there is a brake above 112.90(R1) then it could open the road to the next resistance at 113.60(R2).
- We get Norway’s rate decision today and is forecasted to remain unchanged as well. The Norges bank have had mixed data recently, with GDP accelerating and unemployment sliding in august.
- US release the Philly Fed Business activity index of September and an initial jobless claim for September.
- Also ECB president Mario Draghi and executive board member Peter Praet are speaking today.
- Support: 1292 (S1), 1280 (S2), 1265 (S3)
- Resistance: 1300 (R1), 1315 (R2), 1333 (R3)
- Support: 112.20 (S1), 111.80 (S2), 111.00 (S3)
- Resistance: 112.90 (R1), 113.60 (R2), 114.30 (R3)