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The US FED gave us a surprise!
Good day Koalas. TODAY is take profit for the beer money day!
The EUR/USD blasted through 1.3600 as an aftermath of the surprise FED discount rate hike.
I SIMPLY LOVE IT WHEN MY CHART WORKS! The currency pair tested the 1.3455 area and eased off.
Looking at the big chart above and one can see that the S&P 500 is pretty bullish. Sentiments are rising with regards to the recent good performance of the US economy.
Oil is now trading at $77+. Boosted by the positive sentiments, a break above $80 may indicate a new era of economic recovery.
Gold is currently trading at $1116+ despite a strengthening US Dollar. We may be having demand with regards to preparation for rough waters ahead. Gold is a popular safe asset.
Although the numerous economic releases came up mixed today, the market is still pretty psyched up about the FED’s decision to raise its discount rate. This is seen as a possible indication that the FED believes that the recovery is solid enough to take this action. Coupled with the recent bound of positive news streaming from the US, confidence is high. Reports stated that other central banks may follow suit and take respective actions to wind down stimulus measures taken during the crisis.
Regular readers will know that i the Koala always consider both sides of the fence.
While all this partying about the recovery goes on, we have investors who are risk adverse and fear that all this unwinding of stimulus measures may be premature and thus stalling a fragile recovery. I personally feel that all this fear may not be unfounded. Today i came across a report that states that US mortgage foreclosures rose to record in the 4th quarter. Furthermore, a recent report indicates that about 1 in 5 US homeowners with a mortgage is in “negative” equity.
Let us remember too that the Greek deficit remains to be solved and we are not rid of the risk that Spain and Portugal may join the club.
Bullish pressure may push the currency pair back to test 1.3550.
Bearish comeback may aim for another test of 1.3455.
My eyes are better today. Thanks for your kind concerns. A koala suggested that i use black instead for my charts to ease the strain on my eyes. Hmmm, i don’t know why but i never like black for a background. I always prefer cheerful bright colors. LOL
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