Daily analysis

Yesterdays FOMC meeting turned out as expected by many analysts who had predicted the "operation twist" selling of short term treasuries of up to $400 billion and buying long term government bonds of the same amount in the future to try maintain a flat yield curve .The move was mainly a consumer driven approach to reduce long term rates that are used for mortgages,SME loans etc.This caused the dollar to appreciate especially against most pairs with the greater yield differentials such as the AUD,NZD and the troubled GBP. We are currently trading lower after the announcements and seems to have sold off further during the Asian session through to the European session.Market players have began acting on yesterdays news which has seen the dollar index rise extensively forcing most major pairs plunging. The Aud/Usd managed to breach a long term trend line taken from the 1st of December 2010 to 21st September 2011 price action and the 38.% fib level.

 Eur/Usd has also made a lower low at 3385 today which may signal lower price action movement in the coming days.I will be looking for positions after corrections to go bearish to the 1.3000 area big round number as chasing moves after they have already gone past is a dangerous strategy that can backfire on you.The Loonie has really blown off the roof moving more than 400 pips since yesterday with the news from the FOMC meeting beginning to take effect.The CAD is closely linked to the USD by virtue of being its biggest trade partner.

There was news that Greece might actually get the requested bail out fund which prompted some of the Euro pairs to rally such as the Eur/Aud,Eur/Gbp and the Eur/Cad that have gained more than 150 pips on each.
The BOE on the other hand is trying to put in place a more or less quantitative easing programme that yesterday saw the Pound loose ground against the dollar,the Yen and the Euro with the biggest loss coming with the Yen that is under a lot of pressure due to its economical implications as it continues to appreciate against the major currencies.
The Yen which is now trading higher today against the Dollar despite some official bids to try and keep the currency a little bit weaker which saw the yen pairs rally yesterday but again finished lower. If it continues in this direction expect a lot of rhetoric from the Japanese authorities on intervention which time and time again ha proved to be fruitless against the markets looking for a haven currency. I will certainly be looking to buy into this market when we experience further appreciation of the Yen against most pairs.

Good luck trading to all and make sure you do your own analysis.