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Came out at 3.9%. I was short because I was in a purely technical short trade from the 4 hourly candles (double top) and got lucky here, closing the trade at 10 points profit.
My thoughts on this are that this will increase the chances of either serious concerns over rate cuts or even the unexpected no rate cuts and the USD finding a floor. That is my view for tonight, I have not decided yet whether to trade it.
The other perspective is the cuts, which presumably could pave the way to 2.1000
I like the SSI from FXCM brokerage. It is a “contrarian” indicator. Their analysis is worth investing $300 in a mini account just for the analysis in my opinion. Excellent forex broker.
The SSI reveals that something like 80% of traders are short. Because it is contrarian it has signalled more gains for the GBP/USD. It has been accurate all week this indicator.
I’m looking forwards to the announcement. I am not sure yet whether I will go long or short or just stay out. It might be worth a calculated risk or hedge trade even though I never normally trade news. I do try news once every few months, normally with success because if you know how to read your charts, the technical analysis can point the way towards the economy.
The only time when the news is dangerous is when it opposes the technical analysis (the market should reflect all factors as they happen if it is to be considered an “efficient market”)
In this way I would say to Grace Cheng of http://www.gracecheng.com that the comment http://www.gracecheng.com/blog/582/Watch%20Out%20For%20Bernanke’s%20Magic%20Scissors.html about Dick Cheney reflects that the market will give a true indication of the value of a currency rather than he “wants” the USD to go down.
Whilst it may be true that further dollar weakness will pave strength later next year, the more we get closer to the FOCM minutes, the more I’m feeling that there could be a dovish surprise. Anyway, nobody knows for sure.
Another reason I think there is now more scope for US to not cut rates is the Chinese Yuan gains a couple of days ago (0.8% ???)…
I think on this blog, I do give my personal opinion. I do not reflect the analysts views, and in that way, am open to being totally wrong. Just as my accounts are my responsibility, yours are yours.
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