USD surges on the release of FOMC statement
The Dollar Index rose to session highs after the latest FOMC Statement was little changed from the previous.
The Index was trading at 82.65 ahead of the Statement's release, and now finds itself testing the 83.10 level. EUR-USD is -65 pips at 1.2230 as trade holds near session lows. The single currency has spent a good portion of the past week near the 1.2300 resistance level, but has fallen off that level on today's slide.
Traders remain cautious ahead of tomorrow's European Central Bank interest rate decision as markets now look for ECB President Mario Draghi to live up to his promise of taking bold action.
GBP-USD is -120 pips at 1.5550 with today's steep slide dropping the pair back onto the lower end of its trading range.
Sterling is on track for its 3rd consecutive losing session, and is back below its 50-day moving average. Traders remain on the lookout for a breakdown of the 1.540/1.5450 level which would produce a retest of critical support in the 1.5250/1.5300 area. The Bank of England will opine tomorrow with some calling for the central bank to further expand its balance sheet. Britain's Construction PMI is due out ahead of tomorrow's rate decision.
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USD-CHF is +50 pips at .9815 with today's buying lifting the pair off .9750 support. Swiss banks reopen tomorrow following Independence Day and will be ready when retail sales and SVME PMI cross the wires
USD-JPY is +35 pips at 78.45 after seeing a sharp rally on the heels of the FOMC Statement. Buying lifter the pair off the 78.00 support level, and has it on track for its best close since July 23. The first upside test is the 78.50 level, but more importantly will be how the pair acts at 79.15 (if it gets there) which is home to both the 50- and 100-day moving averages.
AUD-USD is -25 pips at 1.0465 after the majority of the last two sessions above the 1.0500 level.
The hard currency saw a sharp 60 pip drop following the release of the FOMC Statement, and is now looking to hold near-term support near 1.0450. A lower close would mark the 2nd straight session of losses. Australia's trade balance will accompany tonight's retail sales figure.
USD-CAD is +5 pips at 1.0040 after trade reversed into positive territory on the broad-based dollar strength. Sellers dropped USD-CAD onto parity for a second consecutive session, but were unable to push the pair any lower as bulls held their ground. Canadian data is once again absent with trade continuing to takes its cues off what happens in the US.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.