Trading strategy: small short at 1.3160, stop at 1.3240(0.5% risk), objective at 1.3010
The dollar lost some ground yesterday after the Fed has left interest rates unchanged, at 0.25%, and announced a new round of quantitative easing. Dollar's losses were short-lived as former support around 1.3230 provided a stable resistance and the euro is back to 1.3100, where it found support before the Fed decision. Current decline is also driven by the EURJPY which is losing more ground since it breached below last week's bottom around 112.70.
More downside action is in the cards as the growth sensitive pairs are unlikely to draw major buying interest at this time. Although on a short-term basis current decline is corrective only, 1.3000 remains in focus and upside pullbacks will probably face selling orders into the 1.3180-1.3230 region. Above 1.3200/30, uptrend resumes - but look only for a clear break not some 10 minutes up spike. Current exchange rate is 1.3090 @05:57 GMT
Support: 1.3100, 1.3050 and 1.2970/00
Resistance: 1.3200/30, 1.3330/50, 1.3400 and 1.3500
Market sentiment: long term - bearish, medium term - slightly bullish, short term - bullish, intra-day - bearish
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Have a good day and happy trading!