Forex News and Events:

While the FOMC failed to excite the market, it was SNB's currency intervention which provided the day's fireworks. Overall, the Fed stuck to the company line (perhaps a slight hawkish lean) stating conditions in financial markets have generally improved in recent months and the pace of economic contraction is slowing in regard to growth. In regard to inflation, stated “substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time. And finally in order to temper the markets' tightening expectations stated economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The accompanying statement interestingly enough failed to mention an exit strategy, which suggests the FOMC members believe that recovery is still far off. The ECB first 12-month refinance operation went well, with 1121 banks asking for EUR442bn (a massive amount of liquidity). The key question is what the banks will do with the new capital. The ECB hopes that banks will lend the money out, easing credit conditions. However, we have our suspicion. In fact we are concerned that the large demand is representative of weak balance sheets rather than demand from consumers. But the real drama was in Switzerland . While unconfirmed by the SNB, we have heard from a few banks that they saw official names buy EUR and interestingly USD, against the CHF. The EURCHF jumped from 1.5013 to 1.5381 while the USDCHF climbed to 1.1022. In the past, post-intervention sell off in the CHF has been short lived and give 1. the SNB is only looking to halt appreciation and 2. CHF is still undervalued against the EUR we expect yesterday's move to be temporary. While the SNB is keen on easing monetary conditions through currency intervention helping to fight off deflation, we don't expect the SNB to step right back in until the 1.5000ish level. On the docket today is US GDP, PCE and initial jobless claims.

Today's Key Issues (time in GMT):

00:00 ZAR SARB interest rate announcement, % Jun 7.00 exp, 7.50% prior

06:00 GBP Nationwide house price index, % m/m (y/y) Jun -0.4 (-10.7) exp

07:00 EUR ECB's Bini Smaghi participates in a panel discussion on the subject of Lessons of the crisis in Rome

07:15 SEK Manufacturing confidence, index Jun -30 exp

07:15 SEK Consumer confidence, index Jun -8.8 exp

07:30 SEK PPI, % m/m May 0.0 (3.5) exp

09:00 EUR Industrial orders, % m/m Apr -0.3 exp, -0.6 (-31.2) prior

12:30 USD GDP, % q/q saar Q1-F -5.7 (-2.5) exp, -5.7 (-2.5) P

12:30 USD GDP price index, % q/q saar Q1-F 2.8 (2.1) exp, 2.8 (2.1) P

12:30 USD Initial jobless claims, thous (4wk mvg avg) 20-Jun 608 (616) exp

14:00 USD Fed Chairman Bernanke testifies on the Bank of America-Merrill Lynch deal before the House Oversight Committee

18:30 EUR ECB Executive Board member Stark speaks at the annual dinner of the German-British Chamber of Industry London

19:30 MXN Retail sales, % y/y Apr -5 exp, -0.5 prior

22:45 NZD Real GDP, % q/q Q1 -0.7 exp, -0.9 prior

23:50 JPY Nationwide CPI ex. perishables % y/y May -1.1 exp, -0.1 prior

23:50 JPY Tokyo CPI ex. perishables % y/y Jun -1.0 exp, -0.7 prior

23:50 JPY Nationwide CPI % y/y May -1.1 exp, -0.1 prior

23:50 JPY Tokyo CPI % y/y Jun -1.3 exp, -0.8 prior

The Risk Today:

EurUsd initial support at 1.3830 ahead of 1.3750. Recovery through 1.4178 required to re-instate the bullish tone.

GbpUsd a break above 1.6660 necessary to reinforce the bullish theme. heavy tone and currently trading near horizontal support at 1.6189.

UsdJpy Looking for 97.20/30 area to provide strong resistance on the topside today, with bearish moving averages still to the fore. 94.40 supports

UsdChf the SNB changed the game. Rapid rise from 1.0633 has cleared 1.0986, targets 1.1030 near term key Fibonacci resistance. Remains vulnerable below 1.1264 key resistance.

Resistance and Support:

EURUSDGBPUSDUSDJPYUSDCHF
1.43371.675098.901.1060
1.42671.672097.201.0990
1.41771.666096.301.0910
1.39401.626596.451.1008
1.38301.629594.501.0875
1.37501.618993.801.0815
1.35901.596291.501.0765
S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot