Waiting for the dust to settle.

There had been talk of a 0.5bp rate cut at tonight's meeting. But the fact it actually happened, I must admit was a bit of a surprise to me. In the immediate aftermath of the decision, it looked for all the world a USD short was going to be the trade.

But in an example of why it's always a good idea to wait until after the press conference, USD weakness has reversed as YIELDS have risen.

I believe the USD strength is bourne out of the fact the projected interest rate in 12 months tine is the same as it was before the decision.

Ultimately, the Up and down 'price action' (or down and up) means it's difficult to form a conviction in this moment. And I'll wait for the market to make up it's mind....

My preference would be for a return of the 'soft landing' narrative, meaning short JPY or CHF.

Scenario 2: 'USD short narrative', meaning the market accepts the begining of a FED easing cycle and the USD is weak. Which also opens up the option of CAD shorts.

Scenario 3: The market is panicking the FED has cut by 0.5bp and 'risk off' grips the market. Meaning 'long JPY'.

Scenario 4: more uncertainty, meaning no trade.

So, in these complex times. I'm sorry to once again report no trade.

Please feek free to email any thoughts or questions, you may have a different opinion than me: johnelfedforexblog@gmail.com