FOMC decision/statement at 2:15 PM

The Fed will release their decision on interest rates (no change expected) and statement on general economic conditions in the US.  Last month the Fed announced the quantitative easing measures  Currently, the Fed has authorized the purchase of $300 billion of Treasury securities, $200 billion of federal agency debt,  and $1.25B of agency mortgage backed securities.  The target Fed Funds rate remained at 0.25%, the lowest level on record.

The expectation is all the values above to remain the same although there are some economists who are predicting an increase in the amount of Treasuries purchased.  The implications of such actions would be lower interest rates with the desire for lower mortgage rates.  Given the mortgage application data this morning, (down 18%) clearly the risks are that housing does not rebound sufficiently enough to increase consumer confidence and ward off job losses and foreclosures. It is more of a long shot, but it is possible. 

The stock market is up 185 points today, perhaps in anticipation of a “green shoots” type comment.   I honestly, do not know what they might say.  On one hand I don’t see them going out on a limb and predicting good times ahead given the evidence from Initial Claims and weekly housing data.   However, regional manufacturing is showing some signs of improvement and there may be a stabilization as the economy takes a breathe and calms itself.

EURUSD hits trendline resistance

The EURUSD is backing against the trendline resistance at the 1.3332 level.  I am more inclined to sell up here at the moment given the trendline resistance from the December 18th high – with a break above this level now needed.

USDCHF breaks 200 day MA

As mentioned earlier and in our morning commentary, the USDCHF has key support at the 200 day moving average. The level comes in at the 1.3355 level. The price has moved down to a low of 1.1301 on the break.   The close will still be eyed by market technicians  (a close below is needed on a closing basis).  However, given the price was tested a number of times, the market will be looking for continued selling.

GBPUSD moves to Fibo and backs off. 1.4753 remains as intraday support

The GBPUSD moved to the 61.8 Fibonacci Retracement price at the 1.4811 level (1.4812 high) and reversed to the 1.4774 leve.  The pair continues to have support against the 1.4753 level intraday, with a new upside break needed  to move to the next level.  May be time for some intraday consolidation.

EURUSD tests 50% retracement resistance

The EURUSD is testing the 50 % retracement of the move down from the March 23rd high to the March 20th low. The level comes in at the 1.3314 level.  I expect some profit taking at the current level.  However, the bias remains to the upside for the pair with dips likely bought.  A move to new highs should not be faded however (above 1.3330).  1.3277  should contain downside (the old high today).

GBPUSD breaks higher toward 61.8% retracement resistance

The GBPUSD broke above the highs for the day and triggered stop buying.  The price moved up quickly to the 1.4806 price. The 61.8% retracment target is 1.4811 of the move down in the chart above.    The price has corrected back down but the bias still remains to the upside for the pair.    A move below 1.4753 would be needed to change the intraday upside bias in the pair now.

EURUSD moves higher off the shorter term moving average support

Since the earlier post (CLICK HERE TO READ) outlining the intraday support on the 5  minute chart at the 1.3219 level.  buying against a stop below has led to a move back toward the highs for the day. 

The high price so far on the move has reached 1.3273.  The high for the day becomes the next level to break in order to continue the trened day higher.  That level comes in at the 1.3276 level.  

The 100 bar moving average (blue line in the chart above) has moved up to the 1.3235 level (and rising).  This can be used as a stop, as can a new low  at 1.3225.  A break of the high would target the 1.3300 level which is the high from March 24th.

Markets are moving – Find out the bias on the majors

Greg and Shawn discuss the directional bias on a number of the forex majors today.