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[GVI Forex 2]

BOE unchanged as expected… 8-1 vote vs 7-2 expected… statement taking slightly more hawkish… GBP up

[GVI Forex 2]

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

After a typical skittish first-day reaction, world markets are on Thursday embracing the new Federal Reserve stance as insurance on the holy grail of a soft economic landing.

Fed boss Jerome Powell described Wednesday’s outsize half-point interest rate cut as a ‘recalibration’ rather than some panicky emergency, and investors are taking the move as a sign the Fed will seek that new ‘neutral’ quickly without necessarily being forced into it by a weakening economy.

Morning Bid: Stocks lap up Fed’s fast ‘recalibration’, BoE up next

[Mtl JP]

50pt cut joke
–

Fed slashes interest rates by a half point, an aggressive start to its first easing campaign in four years – jeff cox on CNBC

From his piece: “The decision lowers the federal funds rate to a range between 4.75%-5%. While the rate sets short-term borrowing costs for banks, it spills over into multiple consumer products such as mortgages, auto loans and credit cards.”

Kids … let me remind you that the previous federal funds rate was 5.25 – 5.50
Jeff kindly reminds us that the federal funds rate is now 4-75 – 5% —– borrowing costs for banks. ROFL.
In real life banks take the higher end of federal funds rate into their accounting. Effectively, the banks are looking at at best a 25pt reduction on the spreadsheet.
This is a ridiculous calculus and basically means nothing in the real world.

Jeff is an enthusiastic peddler if one reads his headline : aggressive start to its campaign. Jerome, if you paid attention to his presser said no such thing. In fact jerome tried to reiterate that “we’re going to be making decisions meeting by meeting based on the incoming data …. that the actual things that we do will depend on the way the economy evolves we can go quicker if that’s appropriate we can go slower if that’s appropriate we can pause if that’s appropriate but that’s that’s what we are contemplating (powell around the 945 timeline)

[GVI Forex 2]

AUDJPY DAILY CHART – 200 day mva

Momentum shifting to the upside but would have to get through 9984, where the 200 day mva (yellow) is around there as well, to  confirm an end to the downtrend.

[GVI Forex 2]

JP, probably a bet on a soft landing and no recession

[Mtl JP]

GVI 12:09 / with stocks where they are did the market swallow jerome’s presser-reasoning he tried to emit for the 50pt cut ?

[GVI Forex 2]

AUDUSD WEEKLY CHART – AND THE WINNER IS….

AUDUSD up 1% and so far the outperformer

On the downside, 2 levels to watch:

.6825 (key daily resistance broken) and 6800

Maintains a bid while above .6800, stronger bid if .5825 become support

Watch US equities, which are setting the risk on tone

[GVI Forex 2]

GBPUSD MONTHLY CHART – MULTI YEAR HIGH

As we await the BOE decision, I had to go to a monthly chart to see the broader picture, which is GBPUSD trading to the highest levels since early 2022.

Closest key level is yesterday’s 1.3298 high, then a void above it.

Intra-day support starts at 1.3240

[GVI Forex 2]

XAUUSD 4 HOUR CHART –

Looking at this chart, clear out the broken lines and it is 2500-2600 (record high), upside exposed as long as it stays above 2550.

To repeat what I posted yesterday:

XAUUSD extended its record high BUT THEN HIT A WALL AT 2600.

Look for support as long it trades above 2500-11 but unlike recent days, there are no stops to go for on the upside unless 2600 is taken out.

If it trades between 2500-2600, then 2550 will set its intra-day bias.

[GVI Forex 2]

Stocks up => risk on => usd down but only AUDUSD among the majors has extended its high

Next up is the UK rate decision => no change expected

[SF Monedge]

Good thing I took a quick profit on the UsdJpy sell at the NY high.  This is follow through buying from large money with interest at 140 and it could stick.  Forward contracts and futures/options among other things were buying pre-Fed.

[GVI Forex 2]

Next up Aussie jobs report

Note AUDUSD firm ahead of it (USDJPY 143+}

See our Economic Calendar

[GVI Forex 2]

It may be different this time, of course, but the average one-year stock market return after the first Fed rate cut is almost 5% even when a recession occurs. And it’s more than 16% when the cuts come without a recession materialising at all – the most likely scenario now facing investors.(From Reutets article linked to earlier)

[michael Calif]

previous post:   Law of Time, the decline in USD futures since late June has ended.    :gtwo3

[GVI Forex 2]

When the dust settles, how markets end the week will be more important than the whipsaws we saw today.

[GVI Forex 2]

BTC 4 HOUR CHART – Still In Limbo

Bitcoin remains in the background, finding some support as seen by its trendline but not enough so far to build momentum.

If you take 50K-70K a a range, then 60K is neutral.

[GVI Forex 2]

XAUUSD 4 HOUR CHART- Post FOMC Whipsaw

XAUUSD extended its record high BUT THEN HIT A WALL AT 2600.

Look for support as long it trades above 2500-11 but unlike recent days, there are no stops to go for on the upside unless 2600 is taken out.

If it trades between 2500-2600, then 2550 will set its intra-day bias.

[GVI Forex 2]

NAS100 DAILY CHART – 20k OR BUST?

NAS100 finding support by holding above its 200 day mva (yellow) and moving back above its 100 day mva (blue).

On the upside, key resistance is close enough to 20,000 to use this as the level that would need to be taken out to suggest the record high is in play again.

[GVI Forex 2]

US500 4 HOUR CHART – NEW RECORD HIGH BUT…

A new record high (5692) but so far unable to maintain the breakout through 5673.

This leaves it dependent on 5600+ to keep a bid but in any case, while not fatal the failure to hold the breakout is a disappointment.

[SF Monedge]

Jay – Yields as well as forwards as I mentioned this morning, which were dominant long.  This was priced in as of last week.  But only partly.  Odds are we see sub-140 in time and this little win runs out fast.  I’m already positioning as of now short UsdJpy.

[Author]

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