All about the FOMC tonight

<p>Yesterday the market saw USD gaining strength on views that the US FOMC minutes will be giving away clues as to when the tapering or […]</p>

Yesterday the market saw USD gaining strength on views that the US FOMC minutes will be giving away clues as to when the tapering or ending of QE will begin.  Mixed with some poor UK data, this sent risk off and continued through to Asia, except for AUD which had a slightly better rally due to sentiment that the rate cuts are overdone. The currency found some good support around the 0.9000 level.

Last night’s data in China shows a grim trade outlook after exports surprised to the downside and China’s Li warned that economic growth is under pressure.  Australia’s consumer sentiment dipped but AUD stayed strong and is trading just below the 0.9200 level currently.  Japan’s producer price index rose to its highest since Nov 2011 on oil and the BoJ easing forecasts by economists as Japan’s economy strengthened to help inflation.

Today we have not much in the way of data: German final CPI has come out as expected at 0.1% and French industrial production was slightly better than expected at -0.4%. There was, however, no reaction in the euro which was  currently trading just below 1.2800.  So the day will bring consolidation up until the main event in my view, with USD being the strongest across the board until we hear later tonight what the Fed has in store. Will they disappoint? There’s no clear indication as to when QE will be reduced or tapered.

 


EUR/USD

Supports 1.2840-1.2750-1.2660 | Resistance 1.2805-1.2850-1.2880


USD/JPY

Supports 100.25-99.75-99.25 | Resistance 100.80-101.30-101.50


GBP/USD

Supports 1.4850-1.4825-1.4760  | Resistance 1.4900-1.4925-1.4980

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