MPC minutes are the only distraction as we await the FOMC rate announcement

<p>USD/JPY Range: 76.11 – 76.65 Support: 75.80 Resistance: 77.30   The market seems fairly certain that operation twist will be the outcome from the FOMC […]</p>

    Range: 76.11 – 76.65
    Support: 75.80
    Resistance: 77.30


    The market seems fairly certain that operation twist will be the outcome from the FOMC decision tonight and probably a further downgrade assessment of the economy, then a test of the BoJ resolve as this could send USD/JPY tumbling further. We have seen a very close test of the all-time lows in USD/JPY (75.93) overnight but with rumours from the SNB regarding a higher SNB EUR/CHF peg it didn’t take much to get the BoJ invention rumour into the market with a quick spike to 76.65. Traders are starting to expect the BoJ to come to market but if this is to come, it is unlikely to be before this week-ends G20 and IMF meeting as they will want the support of other finance ministers to complete a successful intervention.

    Range: 1.3680 – 1.3724
    Support: 1.3500
    Resistance: 1.4000


    With the European crisis now spreading like wild fire and the only official solution seemingly being to   ‘kick the can down the street‘, traders seem firmly in a sell euro rallies mode as a Greece default is potentially imminent despite the official lines that all will be ok, albeit without much evidence. Even if we see a shock via the FOMC tonight or there is a continuation of the rumours of a higher EUR/CHF peg to 1.25 from the SNB, it will be interesting to see if traders use any rally to sell EUR/USD.

    Range: 1.5719 – 1.5749
    Support: 1.5650
    Resistance 1.5850


    With the global growth situation looking precarious to say the least and the UK economy showing  signs of catching a cold from Europe, it will be interesting to see the voting pattern from the MPC with regards to further stimulus measures. The outcome seems finely balanced if any other members are to join Adam Posen in voting for an increase in QE. Should this be the case, then sterling could be under pressure and a test of 1.5650 might be imminent.


  • From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties.  These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content.  Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell.  You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure.  No representation or warranty is made, express or implied, that the materials on our website are complete or accurate.  We are not under any obligation to update any such material.

    As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website and any such liability is hereby expressly disclaimed.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.