- As widely expected, the FOMC kept the target range for the federal funds rate at 0.25-0.50%.
- Growing support was seen in the hawkish block of the Fed, showing that momentum for a hike is building.
- Esther George (Kansas City) who has become the most visible hawk this year, has been joined by Loretta Mester (Cleveland) and Eric Rosengren (Boston).
- Yellen’s press conference was also seen preparing the markets for a hike later this year, however, rate path has become more gradual than before.
- Although Yellen stressed the Fed’s independence of partisan politics, hike before Election Day (Nov 8) may evoke political repercussions, which the Fed can ill afford.
- This makes December the most likely outcome for the next hike.
- US dollar continues to weakness in light of disappointing FOMC statement, resumed weakness in early Europe.
- USD/JPY trading a narrow range, downside holds major trendline support at 100.05.
- Techs are bearish, break below 100.05 likely to see test of 98.78 levels.
- Major support levels - 100.05 (trendline), 100, 99.54 (Aug 16 low), 98.78 (June 24 low)
- Major resistance levels - 100.93 (Aug 22 high), 101, 101.52 (trendline), 102, 102.23 (20-DMA)
Recommendation - Good to sell rallies around 100.35/40, SL: 101, TP: 99.54/ 99/ 98.80
