DAILY MARKET REPORT

Tapering actually happens

Thursday, December 19th 2013 DroneTrading.com

MARKET COMMENTARY
The US Federal Reserve announced yesterday that in January it will taper asset purchases by USD 10bn from 85bn to 75bn. Bernanke said afterwards that If were making progress in terms of inflation and continued job gains, then I imagine well continue to do, probably at each meeting, a measured reduction. Stock markets as a general rule are buoyant in a low interest rate environment so the prospect of higher rates has caused jitters in markets since tapering has been on the table. The FOMC helped ease these concerns in this meeting by stating that rates will stay low well past the time the unemployment rate declines below 6.5%. Stock indices rallied while the dollar ended the day higher against most major currencies. A notable exception to this was the British Pound which had a 210 pip daily range closing higher for the day in the middle of the range. This was largely due to an upside surprise in UK unemployment which dropped to 7.4% in October- the lowest since April 2009.

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TECHNICAL ANALYSIS
GBPUSD Daily Chart 19/12/2013

- Sterling is in a sideways correction of a longer term bull market- both a lower low and higher high have been formed in the past several days - The 21 Day SMA was broken to the downside but price rallied back above yesterday, price is still well above the 21 Week SMA. - There is bearish divergence between price and the RSI at the key RSI 70 level - There is a bearish weekly shooting star candlestick pattern at around the multi-year high of 1.6375 Support 1.6250 Recent low and September and October highs 1.61 November 6 high, base of November 17-21 consolidation and 61.8% retracement of rally starting November 12 Resistance 1.6480 Yesterdays high

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ECONOMIC CALENDER
GMT 21:45 04:30 Currency NZD JPY Events GDP Q/Q Q3 All Industry Activity Index M/M Oct Actual Consensus 1.10% -0.30% Previous 0.20% 0.40%

07:00

CHF

Trade Balance (CHF) Nov

2.80B

2.43B

09:00

EUR

Eurozone Current Account (EUR) Oct

14.2B

13.7B

09:30

GBP

Retail Sales M/M Nov

0.30%

-0.70%

13:30

USD

Initial Jobless Claims (DEC 14)

332K

368K

15:00

USD

Philly Fed Survey Dec

10

6.5

15:00

USD

Existing Home Sales Nov

5.02M

5.12M

15:00

USD

Leading Indicators Nov

0.70%

0.20%

15:30

USD

Natural Gas Storage

-81

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Drone Trading l Surveilling the Markets