Weekly Trading Forecast: Fed Hike Speculation Gives Way to ECB Taper
The Dollar ended this past week with a discernible lack of direction - despite holding just off 13-year highs. The FOMC decision is still more than a week away. Meanwhile, the ECB rate decision and Euro volatility are at hand.
Both the Dollar and benchmark US equity indexes were positioned for a dramatic move through the end of this past week.
While a ‘No’ outcome would feed into the growing mindset that economic populism is sweeping the West’s advanced economic democracies, it would more or less keep the current political system in Italy in place; the status quo would persist. Markets might act worried initially, selling EUR/USD and Italian equities in the neighborhood 1-3% and 2-4% on the results. EUR/USD could move to test the 1.0462 cycle low established in March 2015.
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