The EUR is the strongest while the AUD is the weakest as NA trader start the day

Technical Analysis

Author: Greg Michalowski | forex

The USD is continuing it's rally post-FOMC

As North American traders enter for the trading day, the EUR is the strongest, while the AUD is the weakest.  The USD is continuing it's move higher after the Fed announced the start of the balance sheet unwind, and said they expect 1 more hike in 2017 and 3 in 2018.  The commodity currencies are hurting on the back of the stronger dollar.   Spot gold is down another -$8.00 on the day. It trades at $1293 now.  Comments from RBA Lowe also helped to pressure the currency. 

Looking at the changes and ranges, most of the action is in the AUD pairs. The EURAUD and GBPAUD is soaring (up 189 and 193 pips and trading at the highs).  The ranges for those pairs are also well above the 22 day average trading ranges.  Looking at the EURAUD chart below, the pair fell sharply yesterday only to find support along a lower trend line near the close. Today's trading has seen the pair move straight to the upside.  The pair currently trades where it all started on Monday and Tuesday. I would expect a cause for pause (or at least for a breathe after the sharp run up. 

The major US pairs have relatively narrow trading ranges. The EURUSD is near unchanged levels with only a 53 pip trading range.  The GBPUSD is also on a sideways track, although lower by -16 pips. The BOJ kept rates unchanged and comments from Kuroda did not shock the market.  The USDJPY is higher on the day, continuing the move higher after the FOMC yesterday, but activity is choppy.

In other markets, the snapshot at the start of the NY session shows:
  • Spot gold down -$8.00 to $1293
  • WTI crude oil is down -$0.50 or -1.01% to $50.17
  • US interest rates are little changed: 2 year 1.4343%, down -0.3 bp.  5 year 1.8728%, unchanged.  10 year 2.2658%, unchanged 30 year 2.8042%, down -0.4 bp
  • US stock futures are lower but  little changed. Dow futures are down -9 points. S&P futures are down -1.25 points.  Nasdaq futures are down -3.75 points
  • European stocks are higher. German Dax up +0.3%. France Cac up 0.5%. UK FTSE unchanged.  Spain unchanged. Italy +0.6%.  
  • European 10 year yields are up a few bps. Germany 0.457%, up 1.4 bp. France 0.741%, up 1.3 bp  UK 1.372%, up 3.1 bp.  Spain 1.604%, up 2.2 bp. Italy 2.104%, up 3.3 bp.  Portugal 2.415%, up 3.4 bp. Greece 5.583%, up 1 bp.