Seemed like our market tried to go into correction mode end of August but has now rebounded and became more balanced. Todays announcement may already built into current market values. My charts and crystal ball is not telling me anything pertaining to all the worlds Markets.
One interesting thing, usually the $$ Dollar like's conditions when interest rates rise. Rising rates are positive for a currency since foreign money is attracted to the higher yield. That's why going long the dollar/shorting the euro is the most popular currency trade on the planet now.
But what happens if the Fed doesn't raise interest rates today? Or if the Fed raises rates but then says something about not raising rates again for several months?
In both cases, the dollar is likely to sell off. Any potential upside move in the dollar as a result of rising interest rates today is already baked into the price. The only way I see the dollar rallying more from here is if the Fed raises rates today and then says it'll continue to raise rates aggressively over the coming months.
I think thats unlikely to happen.
The US Dollar index can't push much higher and has support at around the 93 level. Below 93, though, it's wide open. There's no real support until about 88 – which lines up with last December's low point.
So with resistance just overhead and support far below, the dollar just needs a catalyst to push it lower.
Some of my Dried up Tea Leaves tell me that traders should be looking to short the dollar here. Today's FOMC announcement could kick off the next move lower for the US Dollar.. That's kinda the way I see it..
We shall see within the next hour..