The FED has run out of time. Of course, they can attempt to push the timeline even more, and kick the can down the road, but our believe is that market participants want to see a more defined path and anything short of it will cause them to throw a fit.

Tapering should be announced, and it should be measured to $15 – $20 B per month.

THIS IS NOT TIGHTENING. It will be some time until we see an actual reduction of the balance sheet, but today’s market reaction will dictate the pace of FX for a bit.

We continue to favor a slight bearish USD posture, but are not stubborn and will not stand in the way of the market.

Risk will dictate where we go from here. In addition, the market is nuanced and it may take some time (1-2 days) for the market to digest the new landscape and trend in the direction it will move.

The FED has pinned itself in this tight spot, and now we have to wait and see how they maneuver themselves out of it. This is a PURELY TECHNICAL call, as we see the INDEX trading close to a FIBO that has offered RESISTANCE before.