Tokyo markets quiet
Tokyo markets quiet after the feds news this afternoon. USD/JPY seeing some resistance at 115.45-50 lvl. Eur/Usd pull back some after making a all new high at 1.4503 which is now trading at 1.4470. Aud/Usd showing very little reaction after Retail Sales m/m and Trade Blance numbers came out at 8:30pm.
EURUSD and GBPUSD move higher
EURUSD testing trendline resistance at 1.4488. USDJPY moves up from 115.00 as well, taking Yen crosses higher. GBPJPY targets 240.65 high. A break above 1.4488 and the important 1.4500 level, should target 1.4530 in the EURUSD.
1/4 point decline… Housing slow growth. Inflation a concern
Clearly, the Fed sees what the market sees. A lower dollar has the potential to increase inflation. Oil is up. Commodities are up. Of course there is concern for inflation. However, domestic growth is slow and risks domestically can be a problem if housing prices get hurt more. That should help inflation.
The data today and over the last few days are worth keeping things on hold and watching. If employment starts to weaken, credit crisis accelerates, international economies start to falter, housing continues to get much worse, then they will be inclined to be more aggressive.
As the market heads into the Fed, expect short term swings to dominate
The activity before the announcement will most likely include short term supply/demand swings that may not neccesarily make sense. We have already seen USDCHF head down into the mid 1.1570′s only to bounce back above 1.1600. There was nothing really to influence that move, both on the downside and the upside.
There are some technical levels that may prompt a bid or offer. 115.03 in USD JPY represents good support. 1.4488 offers good resistance in EURUSD and 1.4444 offers good support. GBPJPY has support at 238.88.
Having said that, nothing is guaranteed as this meetings results are of a concern and no one knows the reaction to something like the stock market.
Good luck.
EURUSD, GBPUSD move higher
The EURUSD and GBPUSD squeeze higher as demand for the stronger economies attract the funds. The USD and JPY suffer on a relative basis.
In the EURUSD there is resistance at 1.4483 as we approach EUR and UK close.
USDJPY approaches resistance at 115.58
50% retracement of the October 15th to October 19th decline.
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Crude up $2.50 to $92.90
Inventories declined forcing the price higher.
GBPJPY testing 100 day MA
GBPJPY has crossed over the 100 day MA at 238.88 level. It also corresponds to the 61.8% retracement of the July/August 2007 decline. Getting above these levels suggests a move toward the 240.70 level.
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