Odds favor 2014 start to Fed tapering; next best split between Sept/Oct

FXstreet.com (Barcelona) - The best odds of the Fed’s proposed tapering program beginning in any particular month keep shifting from month to month – the latest favorite seemingly being sometime after January.

PaddyPower’s odds of tapering actually favoring a 2014 start

Gambling website, PaddyPower.com, has the odds of September and October being the month the Fed begins to taper at 7/4 for each month respectively. While most traders are focusing on September or October as the starting month, the best odds for the beginning of the end of QE actually fall in the category of “2014 or later” (the odds there are 6/5).
Rates on the 10-year T-Note – which appeared to be sliding back down to the 2.5% support level coming into the week – reversed higher and finished Monday’s session near the highs at 2.605%. The US Dollar Index (DXY), meanwhile, finished just off the highs at 81.33. Stocks in the US finished around the flat line – perhaps reflecting the lack of a clear edge for any one month.

Technical outlook for the DXY

Technicians have been saying the downside trading target for DXY is likely 80.51 – 80.66 after 81.13 support was broken last week. Once the anticipated low is established, technicians are calling for a sharp move to the upside with an ultimate target of at least 85.00 – which will likely correspond with the Fed’s tapering program. Shorter-term resistance for DXY comes in at the 7/31 closing low at 81.45 and is backed up by the 7/24 peak at 82.42.