The Fed announced that they it reduce it's asset purchases by $15 billion per month, starting this month. This was expected, but still, that's not a raising rate policy.
They are still buying assets, but just less. As such, the dollar may not see any strong gains ahead, we still think it may stop at resistance, especially against strong currencies, like NZD, CAD or GBP in particular if the Bank of England will be much more aggressive today, with their potential hawkish outlook.
In such case, we believe that Pound can be one of the strongest today vs USD and JPY. On Cable below we see deep retracement away from the trendline resistance as UK covid cases jumped.
So technically pair is not bullish yet, but it may turn into interesting bullish structure if we consider potential H&S bottom. However, we need broken trendline, confirmed by BOE actions before we may focus on higher pound.
As per Elliott Wave analysis Cable is coming down, but it can be a correction on 4h chart if we consider that on a daily time frame fourth wave pullback might have already ended. But even this short-term correction has room for 1.3530-1.3570 level before the market may stabilize, ideally this week. For a bullish resumption, we need a rise back to 1.375 or higher to make sure that correction has ended.
