Fed has announced that it will reduce its 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 BOE will be much more aggressive today, with its potential hawkish outlook.
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In such a case, we believe that the 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 an interesting bullish structure if we consider potential H&S bottom. However, we need a broken trendline, confirmed by BOE actions before we may focus on the higher pound.
As per Elliott Wave analysis, Cable is coming down, but it can be a correction on the 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 a 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.
GBPUSD 4h Elliott Wave Analysis
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