Fed drop 8216 patience 8217 but remains dovish and traders drop the US dollar

Yesterday saw an explosive evening session for FX traders, as the volatility over the FOMC didn’t disappoint. The market was kind of expecting a drop of the ‘patient’ wording, which should have given the USD bulls what they wanted to hear, but not today with a dovish tone still prevalent and a ‘wait and see’ approach to the jobs market and inflation. The dollar went into a serve sell mode.

We saw the likes of GBP/USD and EUR/USD rally as much as 500 points throughout the evening, causing all sorts of chaos. However, not all of this is down to the Fed as a rumour hit late on that an algo malfunction was seen to be adding the USD sell.
Overnight and this morning we have seen some large corrections from the highs of 1.09 in the Asian session in the EUR/USD and 1.50 from the GBP/USD and USD/JPY up from 119.70.

The SNB rate announcement has turned out to be a non-event, with rates on hold which was expected at -0.75% and a mention of staying active in the FX markets which has caused a drop in USD/CHF of around 80 points.

Being flagged as an important piece of data today to watch for is the ECB’s targeted LTRO (long-term refinancing option) expected to drop to 40 b from 129.8b.

US unemployment claims to be released later today expected to rise to 295k from 289k and Philly FED manufacturing is set to rise to 7.2 from 5.2.

EUR/USD
Supports 1.0615-1.0360-1.0150 | Resistance 1.1075-1.1290-1.1540

USD/JPY
Supports  119.10-118.15-117.00 | Resistance 121.25-122.40-123.40

GBP/USD
Supports  1.4690-1.4390-1.4150 | Resistance 1.5220-1.5460-1.5750