The initial reaction to the FOMC rate decision is for a marginally lower dollar:
- EURUSD: The EURUSD moved to a new session high and in the process extended above the 200-hour moving out of 1.06902, but still remains below its 100-hour moving average of 1.07018. As noted in the video before the decision, getting about both the 200 and 100-hour moving averages are needed to increase the bullish bias. So far that has not happened.
- USDJPY: The USDJPY is modestly lower, but remains above the swing area outlined in the video outlining key levels through the release at 157.23. The 100-day moving average at 156.994 is also a level that would need to be broken to increase the bearish bias.
- GBPUSD: The GBPUSD has moved higher and has moved up to test this 100-day moving average at 1.25125. However, buyers have not been able to push through that first target. It would take a move above that level to increase bullish bias at least in the short term
A snapshot of the stock market nine minutes after the rate decision:
- Dow industrial average up 146 points versus a gain of 120.36 points just prior to the decision
- S&P index -5.92 points versus -11.64 points just prior to the decision
- NASDAQ index -7.7 points versus -37.37 points just prior to the decision
In the US debt market yields are down a couple of basis points 11 minutes after the rate decision:
- 5.001%, -4.4 basis points versus 5.0206% just prior to the decision
- 4.678%, -4.5 basis points versus 4.697% just prior to the decision
- 4.636%, -4.8 basis points versus 4.651%, just prior to the decision
- 4.737%, -5.1 basis points versus 4.744%, just prior to the decision
The market sees 32 basis points of cuts vs 30 bps before the release
This article was written by Greg Michalowski at www.forexlive.com.
