All Eyes Are On FOMC

All Eyes Are On FOMC. Market hopes for some kind of Fed balance sheet expansion, though QE3 not widely expected some extension in Operation Twist has been suggested, though market seen open to disappointment. However, Bernanke press conference later may soften the blow by lowering inflation and output forecasts.
EUR/USD
Range: 1.2662 – 1.2693
Support: 1.2660
Resistance: 1.2690

Euro-dollar closed in NY at 1.2685 after rate’s late rally had extended to a high of 1.2730 as market reacted to a press report suggesting that Germany had agreed to the eurozone bailout fund buying debt. Later denials from German officials eased rate back to the 1.2680-1.2685 area. Rate initially edged to 1.2690 into early Asia before turning lower, squeezing down to 1.2662 as risk-on was pared back, G20 provided little market response. Main focus remains on the FOMC with market hopes for some kind of Fed balance sheet expansion, though QE3 not widely expected some extension in Operation Twist has been suggested, though market seen open to disappointment. However, Bernanke press conference later may soften the blow by lowering inflation and output forecasts. Resistance around 1.2690, a break to open a move toward 1.2705-1.2715 ahead of a retest on that 1.2730 level. Support in the area between 1.2660-1.2640.

GBP/USD
Range: 1.5710 – 1.5743
Support: 1.5710
Resistance: 1.5746

Cable closed in NY at 1.5726, after its late recovery extended to a high of 1.5757. The rate eased to 1.5718 ahead of the session close. The rate nudged up to 1.5728 in opening Asian trade only to meet strong sell interest that squeezed rate down to lows of 1.5710. Move met willing buyers into the dip allowing rate to recover through the balance of the session to a high of 1.5732, extending to 1.5736 into early Europe. Euro-sterling was restricted within a tight 0.80575-0.8069 range in Asia, opening Europe around 0.8060. Cable resistance seen initially at 1.5746, a break to expose Tuesday’s high at 1.5757. Offers seen into 1.5760, a break to open a move toward 1.5780-1.5785 ahead of post Greek election highs of 1.5802. Support remains at 1.5710-1.5700.

Gold
Range: 1,618.51 – 1,622.05
Support: 1,617.68
Resistance: 1,629.71

Gold prices are trading moderately higher ahead of the conclusion of a two-day policy meeting by the Federal Open Market Committee (FOMC) due to be posted later today. Gold prices have been underpinned in recent sessions by some speculative buying as investors gamble on hopes of some form of quantitative easing (QE) program to be implemented by the Federal Reserve at the conclusion of their two-day meeting. A trail of disappointing U.S. economic data of late has raised expectation levels, although an air of caution should remain. Gold prices did not get back above yesterday’s high of around 1,633 prices have been in a narrow range, holding around lows of 1,618.00 and stalling to the upside at 1,622.60. Support line now shows 1,617.68 and resistance at 1,629.71.