Fed is expected to announce another rate cut at 2.15EST today probably 25bp. However, there is 20% chances that the Fed will cut another 50bp from 4.5% to 4.00%. 50bp cut will shows that the US economy in badly shaped and need immediate action to spark the economy.
We believed that any other that 25bp cut (no cut or 50bp cut) will be a surprise and will spark volatility in the market. Big movement is expected if this really happened. Fed Chairman speech will commence after the the decision to conquer the decision. A hawkish action despite the cut may bring relief to the dollar and prevent it to drop further.
Trading Recommendation
Buy GBPUSD if they CUT 50bp
Sell GBPUSD if they HOLD
No Trade if they cut by 25bp since the market already priced in for that figure.
Good Luck and Happy Trading!
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25bp cut is confirmed. Want to see a surprise today