Forex Trading: Fed Decision at 2:15 PM

Of course they all seem important but the Fed decision this time seems more important.  I think the Fed will do 100 Basis points as per the concensus.  They may hesitate due to the effect it may have on the US dollar ,but if they have not been concerned about the dollar before, why change now (it does not mean it is right but that is their agenda).  The Fed will see that keeping the rate low is a way to help shore up the banking system more and hopefully help the housing market as well.  I just hope the yield curve does not go back to steepening dramatically but that may be the risk. 

The Currency moves will be volatile. I cannot begin to tell what may or may not happen as some pairs will be influenced by stocks, some not as much.

However, a 100 basis point cut should support the stock market for a little bit at least.  So USDCHF should benefit - above 1.0000 is positive.  USDJPY may benefit but the top will probably be limited as the Japanese year end is supporting demand for JPY for the time being (at least til month end).  EURUSD has support at 1.5685.  I would not want to see it trade below this level for long.  Target on the upside goes to 1.6016.  GBPUSD 2.0462 is a target on the upside, the 2.0000 level on the downside must hold to keep the uptrend move intact.

Whatever the outcome, the movement will be volatile with liquidity tight as the market digests the implications in all markets.