Fed rate decision today 0.25% rise | Buy the rumour sell the news

15th March 2017

Good morning. Well here we are with today being the “will they wont they” raise interest rates. The decision is announced at 6pm our time, with a rise of 0.25% expected. We also have a 9.6 dividend this week, which will be applied today so bear that in mind. Might see a few divi hunters come out for that before the bell this afternoon. Oil was fairly volatile yesterday which led to some movement in the FTSE 100, rising above $48pb. The swings in oil interrupted the calm that’s gripped markets ahead of central bank decisions, European political drama and a raft of economic data that could set the tone for financial markets for weeks to come. With the Fed all but certain to raise rates, investors have been weighing how oil’s precarious level and looming inflation readings could impact the central bank’s path for future moves.

Volatility is rising this week, with the VIX in the U.S. jumping the most in a month on Tuesday, while a gauge for the Nikkei 225 Index is up for a fourth straight day.

FTSE 100 Outlook and Prediction

I mentioned support at XXXX to XXXX yesterday and it held well for a bounce overnight to a high at 7375. This is where it now gets interesting as we have resistance at XXXX so might well see a bit of a dip from this area initially this morning, though I am expecting a bit of a buy the rumour, sell the news day. That said I imagine that a 0.25% rate increase is actually already priced into the market. Could they surprise with a bigger rise? Half a percentage point maybe? Don’t think so but you never know. They want it get rates up to more “normal” levels as the economy does well just in case there is a future wobble again and they need to be brought back down. The UK economy continues to perform strongly according to the data, though my gut feel from talking to most people would differ with that. Lies, damn lies and statistics!

Assuming we do have a little drop first thing, then we have support at XXXX. Interesting yesterday high at 7390 tallies with R1 also. So, this XXXX might well hold initially – bit off a double bottom area as well, though if it breaks then a slide down to XXXX looks possible. But, with the Fed news and a 9.6 point dividend later I don’t think it will be overly bearish. In fact. if we follow the ASX200 we have a fairly strong performance from that today.

If we do rise strongly, then I am expecting a stutter around the fib level at XXXX and feel a short here is worth a go. The 2 hour chart supported yesterday at the XXXX area but it was a lacklustre bounce – most keeping their powder dry this week I think.

So, thats the plan, looking at XXXX for support again, possibly XXXX and resistance at XXXX.

You are probably wondering why I have XXXX instead of numbers. Unfortunately people are copying this content and passing it off as their own. As that’s not fair on members who are paying for this content I wont be publicly posting my levels of interest for the moment.

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