Dollar falls sharply right after Fed cut the federal funds rates by 50bps to 3.00% as markets expected. Particular strength is seen in EUR/USD, AUD/USD and weakness in USD/CAD. At the point of writing, EUR/USD is pressing 1.49 level and is set to retest record high of 1.4966 and probably further to 1.5 psychological resistance. Canadian dollar and Aussie also surges on strength in commodity prices.

In the accompany statement, Fed noted that financial markets remain under considerable stress and credit has tightened further. Fed believes the cumulative 125bps cut in just more than a week will help to promote moderate growth over time and mitigate the risks to economic activity. But still Fed believes downside risks to growth remain. Fed hinted further easing, saying that it will act in a timely manner as needed to address those risks. Description on the housing markets and labor markets were unchanged.

The vote was not unanimous, with Fisher voting for no change.

Meanwhile, the discount rate is lowed by unanimous vote by 50bps to 3.50%.

Quick technical update:

EUR/USD: Further rally is expected to test 1.4966 record high and 1.5 psychological resistance as long as 1.4817 support holds. Touching of 1.4817 will turn intraday outlook consolidative first. But pull back should be contained well above 1.4659 support and bring rally resumption.

GBP/USD: Cable is still struggling at prior high of 1.9849 at the point of writing. Nevertheless, further rally should still be seen to 2.0099 resistance first as long as 1.9837 minor support holds.

USD/CHF: Swissy's fall from 1.1596 could be ready to resume. Break of 1.0846 and 1.0836 support zone will confirm and target 61.8% projection of 1.1596 to 1.0836 from 1.1120 at 1.0650. Above 1.0951 will indicate consolidation is still in progress.

USD/JPY: remains in range. No change to outlook. Below 105.92 is needed to indicate corrective rebound from 104.96 has completed and bring retest of this low. Otherwise, further consolidation could still be seen.

AUD/USD: Aussie's sharp rally to above 0.9 level indicates rise from 0.8512 has resumed. Break of 0.9018 resistance will indicate that corrective fall from 0.9398 has completed and will encourage stronger rally to retest this high. Below 0.8908 will turn intraday outlook consolidative first. But pull back should be contained well above 0.8768 support and bring rally resumption.

USD/CAD: USD/CAD dives further to below 0.9 level right after FOMC accouchement. Further fall is still expected to 0.9756 cluster support (100% projection of 1.0378 to 1.0015 from 1.0118 at 0.9755). Above 0.9973 minor resistance will turn intraday outlook consolidative first. But upside should be limited below 1.0118 and bring fall resumption.