FED cut rate what will happen ? | Forex Factory

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FED cut rate what will happen ?

  • #1
  • First Post: Jan 29, 2008 7:00pm Jan 29, 2008 7:00pm
If the fed cut rate by 50 point

is the pair like EUR/USD will go higher or lower because the diferential in now negatif ?

and what will happen to the other pair like EUR/CHF or EUR/YEN AUD/USD

thank you for your answer
  • #2
  • Jan 29, 2008 7:16pm Jan 29, 2008 7:16pm
if 0.5 down, perhaps e/u wants to see 1.5, risk to the downside.
/ ... clarifying decisions ... /
  • #3
  • Jan 29, 2008 8:09pm Jan 29, 2008 8:09pm
i really don't see the dollar falling that much if here is a .50 cut. I think that dollar has it already priced in a .50 rate cut. However, if there is not rate cut, i feel the dollar will rally.
  • #4
  • Jan 29, 2008 8:16pm Jan 29, 2008 8:16pm
  •  CWH
  • | Joined Feb 2007 | Status: United We Buy, Divided We Sell | 249 Posts
A breakout in either direction will not hold, imho..
"If, at first, you don't succeed, try, try, try again" - Winston Churchill
  • #5
  • Jan 29, 2008 10:32pm Jan 29, 2008 10:32pm
EUR/AUD is moving side ways and has been trading within a 50 pip range for 1 1/2 days. Volitility is low and indecision is high!

Asian/Australian markets are all down around 1%, probably due to fears that the Fed won't follow through on the 50 bsp cut.

10yr treasury bond yields are still below 3.7%, a sign that happy days aren't here quite yet.

Stay out of any long term trades for now.

_________
scexglobal
  • #6
  • Jan 29, 2008 11:09pm Jan 29, 2008 11:09pm
If they cut
25 Basis point.

See Dollar to strengthen Alot

If they Cut
50 Basis Point

See EUR/USD to push higher towards 1.49-1.50 zone. But wont push higher 1.50 i assume, it will follow how Stocks react

If they Cut
75 Basis CUT

Blindly Keep Pressing the BUY button of EUR/USD it will go to the moon 1.50-1.51

There will be a huge EUROPE and US Rate Gap.
  • #7
  • Jan 30, 2008 7:28am Jan 30, 2008 7:28am
Quoting jacobtrader
If they Cut
75 Basis CUT

Blindly Keep Pressing the BUY button of EUR/USD it will go to the moon 1.50-1.51
...
if that happens, you'll see stock markets collapsing, heavy unwinding of carry trades, and ...eur/usd..? I don't think it'll go through the roof.
.75 cut will send very wrong signal to the markets, you'll see banks reporting more heavy write downs right after....
  • #8
  • Jan 30, 2008 12:32pm Jan 30, 2008 12:32pm
Quoting raczekfx
...
if that happens, you'll see stock markets collapsing, heavy unwinding of carry trades, and ...eur/usd..? I don't think it'll go through the roof.
.75 cut will send very wrong signal to the markets, you'll see banks reporting more heavy write downs right after....
i agree on this 75bp will release hell... hehehehehhe
  • #9
  • Jan 30, 2008 12:46pm Jan 30, 2008 12:46pm
Quoting phmadeira
If the fed cut rate by 50 point

is the pair like EUR/USD will go higher or lower because the diferential in now negatif ?

and what will happen to the other pair like EUR/CHF or EUR/YEN AUD/USD

thank you for your answer
imo up...:
its just money
  • #10
  • Jan 30, 2008 12:52pm Jan 30, 2008 12:52pm
What I'm looking for.

75bps - xxx/USD blowoff top on most pairs, new high on EUR/USD, followed by the beginning of USD strength and downtrend on EUR/USD to 1.45

50bps - xxx/USD with a small/minor gain, double top on EUR/USD at 1.4920 or 1.4965 this week followed by USD strength and downtrend on EUR/USD to 1.45

25bps - xxx/USD pairs fall back to last week's levels, followed by speculation of the next rate cut (probably 25bps more) and more sideways trading

unchanged - xxx/USD pairs begin sharp downtrend, EUR/USD to 1.45 within a week and risk of further fall to retest longterm Fib support around 1.435.

I'm staying out of long-term decisions until after this goes down, too much uncertainty. Wish I stayed in a few equity trades another day, but profits are better in pocket than on paper these days.
  • #11
  • Jan 30, 2008 1:28pm Jan 30, 2008 1:28pm
I think so EUR/USD has done for today..
The market is confused.. And it appears EUR/USD will fall.
So its better to book all your profits... dont be greedy friends.
  • #12
  • Jan 30, 2008 1:33pm Jan 30, 2008 1:33pm
I had 4 buy stops placed and 1 sell stop, all ahead of support/res levels that didn't seem breakable just in case they broke sometime today while I was out.

Then the announcement... All 5 triggered at once, +150 pips in like 15 minutes, just closed them out before the rebound. Have to say I was not expecting that.

Hey Ben, thanks dude. Stop by sometime I'll buy ya a beer.
  • #13
  • Jan 30, 2008 3:52pm Jan 30, 2008 3:52pm
Quoting raczekfx
...
if that happens, you'll see stock markets collapsing, heavy unwinding of carry trades, and ...eur/usd..? I don't think it'll go through the roof.
.75 cut will send very wrong signal to the markets, you'll see banks reporting more heavy write downs right after....
There we go... only .50 cut and carries are already affected...wait till tokyo opens... or Europe...
If this S&P futures chart can give us any direction... let's take a wild guess where equities open in Europe...
Attached Image
  • #14
  • Jan 30, 2008 4:06pm Jan 30, 2008 4:06pm
Isn't this the perfect beauty?
Attached Image (click to enlarge)
Click to Enlarge Name: perfect beauty.gif Size: 23 KB
/ ... clarifying decisions ... /
  • #15
  • Last Post: Feb 7, 2008 11:27am Feb 7, 2008 11:27am
Quoting youalreadykn
What I'm looking for.

75bps - xxx/USD blowoff top on most pairs, new high on EUR/USD, followed by the beginning of USD strength and downtrend on EUR/USD to 1.45

50bps - xxx/USD with a small/minor gain, double top on EUR/USD at 1.4920 or 1.4965 this week followed by USD strength and downtrend on EUR/USD to 1.45
25bps - xxx/USD pairs fall back to last week's levels, followed by speculation of the next rate cut (probably 25bps more) and more sideways trading

unchanged - xxx/USD pairs begin sharp downtrend, EUR/USD to 1.45 within a week and risk of further fall to retest longterm Fib support around 1.435.

I'm staying out of long-term decisions until after this goes down, too much uncertainty. Wish I stayed in a few equity trades another day, but profits are better in pocket than on paper these days.
Should have stuck with my own advice instead of getting out early. (common theme for me these days with so much volatility, better safe than sorry I guess)

I don't think we're going back up until 1.4355.
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