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  • Writer's pictureMike Paterson

Markets still making their mind up after FOMC raise rates

The US Federal Reserve FOMC last night lifted the Fed Funds target to 1.75-2.00% and suggested 4 hikes in total for 2018 versus the 3 that markets had mostly factored in. Cue the algo boxes driving the US$ higher in the immediate aftermath but reality check selling has since dominated the landscape. We now wait on the latest announcement from the ECB today.

GBPUSD fell to 1.3320 after the FOMC from 1.3385 having survived a test of 1.3300 earlier in the day. The 1.3420-30 resistance/sell area I've been highlighting is still intact though as we recover back to 1.3412.Immediate support/buying now into 1.3380,then 1.3350 with larger buy interest between 1.3300-20 still. Sellers between  the 1.3420-30 line and then 1.3450 still expected to cap for the moment. More offers between 1.3480-1.3500. Some option contract interest at 1.3400 today should help contain.

Keep selling those rallies as we continue to range-trade but don't get greedy.We're still ranging amid all the noise and hype as I keep saying.

EURGBP has been up again to test 0.8820-30 sell interest (GBPEUR down to 1.1340) and looks underpinned generally as we wait on the ECB. Buyers poised at 0.8780-85 still then 0.8750 and 0.8730. Sellers between 0.8820-30 again then 0.8850. Overall the Pound remains fragile still with Brexit never far from the front pages but going nowhere in a real hurry.

EURUSD has rallied to test the 1.1820-30 sell area since the initial general US$ demand pushed it lower again.Buyers now around 1.1780 then 1.1750 with a line in the sand around 1.1730 still. Sellers still between 1.1820-30 then 1.1850 and 1.1885-00. ECB expected to make a few hawkish noises but no surprises imho.

USDJPY has fallen back below 110.00 with large option contracts rolling off there today adding so the renewed US$ selling post-FOMC. Buyers now around 109.80 then 109.50, 109.30 and 109.00 still. Sellers at 110.30 then 110.50 and 110.80-00 still. USDCHF has also fallen back after failing into 0.9900 dips tempered by some EURCHF buy interest now below 1.1600.

The Aussie, NZ and Canadian $ all still ranging but looking a little fragile.AUDUSD has buyers at 0.7530 and 0.7500.Sellers between 0.7580-00 then 0.7630 and 0.7650. USDCAD buyers now around 1.2960 then 1.2920. Sellers around 1.3000 then 1.3030 and 1.3050

Fickle and fragile markets prevailing behind all the noise and hype so get your orders in to take full advantage of the moves.

Have a good day out there one and all.

Interbank Rate 08.45 BST GBPUSD   1.3398 EURUSD   1.1812 EURGBP   0.8816 GBPEUR   1.1341 USDJPY   109.92 USDCAD   1.2974 USDCHF   0.9834 GBPAUD   1.7723 GBPCAD   1.7383 GBPCHF   1.3175 GBPZAR   17.7103 GBPHKD   10.3874 EURHKD   9.1568

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