The main fundamental risk today was the FOMC monetary policy statement. The USD has been rallying as US data in Q2 impressed, and was expected to push the FOMC toward an earlier rate hike than the mid-2015 timeline. However, there was nothing hawkish about today’s statement. In fact it hinted that even if employment and inflation were near what the Fed hope to see, the economy might still require a prolong period of low interest rates. Let’s take a look at how the USD reacted by visiting the EUR/USD, GBP/USD, and USD/JPY.
The EUR/USD might consolidate with upside risk toward 1.35, but there is still downside risk toward the 1.3295-1.33 level. So perhaps we should wait for a short-term rally, and look for sellers. The GBP/USD is actually maintaining the bullish stance in the daily chart as it held above its 2014-trendlines. A short-term bullish attempt can be expected. The USD/JPY broke above a descending triangle, and held around 103 after the FOMC statement. Watch for buyers if it dips to 102. If it stays north, the bullish outlook is in play with 104-104.13 in sight.
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