Later today the long-expected FED interest rate decision will finally be announced and after that the FED Chair Janet Yellen will hold a press-conference.
Market analysts expect FED to hike the rate from 0.50% to 0.75%. My personal expectation is that the interest rate will remain as it is. I have several reasons to think so:
- On 20th January 2017 the US president-elect Donald Trump will be inaugurated. It’s public knowledge that Mr. Trump has both internal and external policy views that are completely different from those of the current American president. In my opinion, an institution like the FED wouldn’t take such an important step right in the eve of such major political changes.
- I also think that the rumour about an interest rate hike has already been overbought and the dollar should begin a necessary correction.
- And last but not least, in the end of the year the long-term investors will wish to take their profits.
- Regarding the pair I have been watching the most lately – USD/JPY – and which I intend to trade today after the news come out all I can say is this:
The divergence on the daily time frame remains and it is an unambiguous signal for a move to the downside. The bars at the end of the rally are also a signal for a drop – they have become small, there is a tiny marubozu that formed after the market opened on Monday, and there are a pair of spinning top bars as well.
I wish all traders luck and success today!
Excellent analysis as usual!
ReplyDeleteGood insight.
ReplyDeleteGood post!
ReplyDeleteUSD/JPY finally found some resistance at 118.70.
ReplyDeleteGreat assessment. I'll keep a close eye on the currency pair.
ReplyDeleteThanks for sharing your view.
ReplyDeleteStrong rally, doesnt seem to stop for now.
ReplyDeleteI agree with your point of view.
ReplyDelete