AUD/USD: 0.9280EUR/USD: 1.3285The Euro, equities and bond prices are all lower after the Fed said it would continue its current stimulus package, and although giving little indication of winding back its asset purchases, Bernanke was less dovish than expected, citing that downside risks to the economy are waning, but warned that unemployment is still too high, although improving.
The US$ has been the big winner today and technically the Euro has now decisively broken the recent uptrend, heading sharply lower and, for the time being, coming to rest right just above the first Fibo support at 1.3270 (23.6% of 1.2796/1.3415). The 1 hour charts have started to point quite aggressively lower and the 4 hourlies appear to be picking up some downside momentum. If the current levels give way, then expect further losses towards 1.3180 (38.2%) and possibly to 1.3105 (50%).
A return higher for the Euro would see some consolidation below today's 1.3415 high, but I think rallies today could be limited to 1.3325 before the downside resumes.
Note that the DXY (81.32) had an outside day, finishing just below its highs (81.50), having earlier been down to a new trend low at 80.49. Added to this, the daily MACD's appear to be turning higher again.
Today will be reasonably heavy on economic data and it will be pretty volatile but overall, the dailiy MACD's look as though they are in the process of topping out and thus, for the next few days, selling into strength looks to be the way to go.
Economic data highlights will include:
Eurogroup Meeting, German PPI, EU Markit Flash Mfg PMI, US Jobless Claims, US Markit Flash Mfg PMI, Existing Home Sales, Philadelphia Fed Mfg Survey
