The euro has moved higher in early North American trading, hitting a 6 day high, as the “risk on” traders are winning the day. The USD remains under broad pressure on all fronts amid speculation the Federal Reserve could announce more aggressive easing later today.
With all eyes on the FOMC meeting, EUR/USD pushed higher and printed its highest in almost a week at 1.3049. It is currently slightly lower at 1.3043.
As far as the technical levels are concerned, if the EUR/USD breaks above the 1.3050 level, the next resistance would be at 1.3085 which was the Dec 6 high. After that the 1.3100 level is a psychological one. On the down side, support can be found at 1.3000/10, 1.2980 and 1.2930.
With most analysts expecting the FED to continue MBS purchases at $40 billion per month and replace Operation Twist with an additional $45 billion per month in longer term treasuries, this has traders “selling dollars and buying risk”. When the rate announcement is made later today, there should be no real shift on rates, and traders will be looking towards Chairman Bernanke’s press conference that begins at 2:15 pm EST for further clues.
In other currencies, the USD/CHF has touched the .9280 level. ZEW numbers from Switzerland showed improvement to -15.5 from -27.9, but no one seemed to care. Again all eyes on the FED. USD/JPY is slowly moving towards 83.00 as risk on trades are negatively affecting the JPY same as the USD.
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