Countdown for QE taper fireworks is on!
The judgment day for the Fed, Sept 17, is nearing, and the market is preparing accordingly for what may represent the most important monetary policy decision taken in years, as the start of QE taper gets kick-started. Even if the next FOMC meeting comes on the back of a rather disappointing NFP past Friday, the communication strategy carried out by Chairman Ben Bernanke & Co. so far suggest that some sort of light taper should be expected, or else the sell-off in the USD might be one that make headlines all over the world. According to Adam Button, Editor at Forexlive, "The market has settled on $10 billion as the most-likely size for the Fed’s taper next week", anticipating that "larger and the dollar will rally hard, smaller and it will fall."
Meanwhile, Treasury traders seem to be perceive the taper being priced in less than 10bln, which makes a bullish case for a stronger USD for those supporting odds for a more aggressive taper. If this scenario happens to be true, some long USD plays vs other G10 currencies such as the NZD, EUR or even the CAD, might be a great play based on this assumption. As Button notes: "I think it’s clear that a taper is coming but the Fed could still change its mind on the size and the messages that accompany it. Two reports in the days ahead could change their thinking: retail sales on Friday and the CPI on Monday."
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FOREX ECONOMIC CALENDAR :
24h | EMU EcoFin Meeting
2013-09-13 12:30 GMT | US Retail Sales (MoM) (Aug)
2013-09-13 13:55 GMT | US Reuters/Michigan Consumer Sentiment Index (Sep)
2013-09-13 14:00 GMT | US Business Inventories (Aug)
FOREX NEWS :
2013-09-13 05:17 GMT | GBP/USD little moved after Carney, US job data
2013-09-13 04:52 GMT | NZD/USD faces formidable 0.8150/70 tech resistance
2013-09-13 04:39 GMT | USD stronger ahead of US retail sales; Gold stalls
2013-09-13 04:38 GMT | EUR/USD capped by 1.3300
EURUSD :
HIGH 1.33022 LOW 1.32644 BID 1.32677 ASK 1.32680 CHANGE -0.23% TIME 08 : 40:28
OUTLOOK SUMMARY : Down
TREND CONDITION : Downward penetration
TRADERS SENTIMENT : Bearish
IMPLIED VOLATILITY : Medium
MARKET ANALYSIS - Intraday Analysis
Upwards scenario: Possibility of market strengthening is seen above the immediate resistive barrier at 1.3286 (R1). Clearance here would suggest next interim target at 1.3302 (R2) and then final aim locates at 1.3317 (R3). Downwards scenario: Further downside extension might face next supportive barrier at 1.3256 (S1). Clearance here is required to open the way towards to interim target at 1.3240 (S2) and any further price regress would then be targeting 1.3225 (S3).
Resistance Levels: 1.3286, 1.3302, 1.3317
Support Levels: 1.3256, 1.3240, 1.3225
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GBPUSD :
HIGH 1.58117 LOW 1.57766 BID 1.57812 ASK 1.57816 CHANGE -0.14% TIME 08 : 40:29
OUTLOOK SUMMARY : Down
TREND CONDITION : Downward penetration
TRADERS SENTIMENT : Bearish
IMPLIED VOLATILITY : Medium
Upwards scenario: GBPUSD tested negative side recently, however we see potential to test resistive barrier at 1.5812 (R1) later on today. Successful penetration above that level would suggest next intraday targets at 1.5838 (R2) and 1.5864 (R3) later on today. Downwards scenario: In terms of technical levels, risk of price depreciation is seen below the support level at 1.5775 (S1). Loss here would suggest to monitor marks at 1.5750 (S2) and 1.5725 (S3) as possible intraday targets.
Resistance Levels: 1.5812, 1.5838, 1.5864
Support Levels: 1.5775, 1.5750, 1.5725
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USDJPY :
HIGH 99.976 LOW 99.418 BID 99.861 ASK 99.866 CHANGE 0.33% TIME 08 : 40:29
OUTLOOK SUMMARY : Up
TREND CONDITION : Upward penetration
TRADERS SENTIMENT : Bearish
IMPLIED VOLATILITY : Medium
Upwards scenario: Further price appreciation is a likely scenario for today according to the technical readings. If the pair manages to clear the barrier at 100.08 (R1), we would suggest next targets at 100.24 (R2) and 100.40 (R3). Downwards scenario: Our next supportive barrier lies at 99.72 (S1). Break here is required to enable downside expansion towards to our intraday targets at 99.54 (S2) and 99.36 (S3) in potential.
Resistance Levels: 100.08, 100.24, 100.40
Support Levels: 99.72, 99.54, 99.36
Source: FX Central Clearing Ltd,( http://www.fxcc.com )