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[GVI Forex 2]

A look at the day ahead in U.S. and global markets from Mike Dolan

Although the Federal Reserve’s “hawkish cut” on Thursday had been broadly expected, markets now fear 4% policy rates will be the floor for the coming year at least – and no further easing until midyear or later.

The picture painted by the Fed removes monetary easing as tailwind from the stock market for months and has seen the dollar rocket (.DXY), opens new tab to its highest in more than two years – bowling over emerging, developed and crypto currencies alike.

Morning Bid: Markets fear Fed floor at 4%, dollar booms

[GVI Forex 2]

NEWSQUAWK US OPEN

US equity futures gain, DXY gives back some of post-FOMC strength, JPY hit post-Ueda

Good morning USA traders, hope your day is off to a great start! Here are the top 4 things you need to know for today’s market.

4 Things You Need to Know

European stocks tumble post-FOMC, MU -15% pre-market weighing on chip peers in Europe; US futures attempting to recoup yesterday’s losses.

USD gives back some of yesterday’s post-FOMC gains, JPY hit after BoJ Governor Ueda’s press conference.

US yield curve steepens, JGBs outperform post-Ueda, Gilts lag pre-BoE.

Crude lifts incrementally off Wednesday’s lows, XAU fares better as the USD pauses for breath.

Try Newsquawk for 7 Days Free

[GVI Forex 2]

GBPUSD 1 HOUR CHART – WAITING FOR THE BOE

GBPUSD retracing but only a break of 1.2720-28 would end the trend.

Note EURGBP held a test of its key .8223 low.

Next up BOE: No change is widely expected

[GVI Forex 2]

I posted this earlier

Treat EURUSD as a retracement as long as it stays below 1.0420-25

(Note EURUSD lagging GBPUSD… high was 1.0422… as EURGBP slips pre-BOE)

[GVI Forex 2]

Using my platform as a heatmap shows it is JPY vs the world

[GVI Forex 2]

While the BoJ may be lurking pressure on the USDJPY upside is coming out of its crosses…

WHICH ARE WEIGHING ON THE USD ELSEWHERE, LED BY GBP, WHICH IS BID AHEAD OF THE NO CHANGE IN RATES EXPECTED FROM THE BOE IN A FEW HOURS (GBPJPY IS +2% ON THE DAY)… Note EURJPY is up 2% as well (helps explain the EURUSD rebound)

Hint: When you see a big move in USDJPY there is generally a cross flow(S) helping to drive the move.

Hint: When you see two currencies moving in opposite directions vs. the dollar it is a sign of real money order flow buying/selling a cross.

[GVI Forex 2]

USDJPY briefly hits 156.78 and then back down…Conspiracy theory says BoJ looks at the same charts… and if I was in its shoes, I would be in covertly selling to protect this level.

[GVI Forex 2]

USDJPY WEEKLY CHART – Key levels loom

You can see why 156.72 (use 156.70-75) is so impoprtant

If firmly broken then 158-160 comes on the radar.

[GVI Forex 2]

All about the JPY selling after the BoJ meeting.

Key USDJPY resistance is at 156.72 (use 156.70-75) … Cross offsets giving some support to others vs USD… Treat EURUSD as a retracement as long as it stays below 1.0420-25

[michael Calif]

daily charts.  Euro Low.  current Nov-Dec low remains polar opposite to the July ’23 high; will this rally Euro from 1.03-1.04 t0 1.12 ….    gtwo3

[Anonymous]

Made 20% of MY capital although the market was ranging abit

[GVI Forex 2]

This triggered the earthquake

The Federal Reserve on Wednesday projected only two quarter-point rate cuts in 2025, fewer than previously forecast, according to the central bank’s medium projection for interest rates.

The so-called dot-plot, which indicates individual members’ expectations for rates, showed officials see their benchmark lending rate falling to 3.9% by the end of 2025, equivalent to a target range of 3.75% to 4%.The Fed had previously projected four quarter-point cuts, or a full percentage point reduction, in 2025, at a meeting in September… truncated (CNBC)

[GVI Forex 2]

US 10 year closing above 4.50%

 

[GVI Forex 2]

And the DOW, which looked like it would end its losing streak wound up extending it to 10 days in a row… also, US500 bounced off my 5834 support.

[GVI Forex 2]

NAS100 DAILY CHART – ???

Trying to give a view after an earthquake hits the market is like looking for a bright spot in a blackout.

Trendline broken, if decisively then probably has to hold 20K to contain the damage.

[GVI Forex 2]

US500 DAILY CHART – Reaction to news…

The old adage “it is the reaction to news that matters” proved true once again following the HAWKISH FZOMC.

I have been pointing out for some time that the failure to follow the NAS to a new record high was a red flag that left it vulnerable.

The break of the trendline indicates the uptrend is over but to suggest more scope on the downside 5834 and 5800 would need to be broken.

Only back above the trendline and 6000 would put the high back in play.

[SF Monedge]

The 10 year yield took off like a rocket on the announcement, which is the opposite of what it should do with a rate cut. Bitcoin fell off a cliff with stocks. I actually do not see the activity going out of bounds in percents of movement. This is about ongoing Dollar strength largely and I do not think the selling in stocks will stick for any significant duration.

[GVI Forex 2]

USDJPY DAILY CHART – WAITING FOR THE BOJ

Following the general USD trend with a lag on some safe haven flows.

Pivotal level is clear at 155 as this will dictate wheher it can make a run at 155.86-156.72.

Next event risk: BoJ decision

[GVI Forex 2]

AUDUSD MONTHLY CHART – Crumbling

AUDUSD crumbling through its 2023 low (6270), leaVING THE PIVOTAL .6200 LEVEL BLOCKING THE 2022 LOW AT .6168.

At a mionimum, .6270 would neeed to be renewed to slow the risk.

[SF Monedge]

I don’t care what the FED does really I just can’t wait until Johnathan Ferro on Bloomberg TV gets transferred.  Please let it be January.

[Author]

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