Dollar eases slightly, stocks edge up, yields dip after FOMC

The initial reaction to the FOMC rate decision is for a marginally lower dollar:

• EURUSD: The EURUSD moved to a new session high and in the process extended above the 200-hour moving out of 1.06902, but still remains below its 100-hour moving average of 1.07018. As noted in the video before the decision, getting about both the 200 and 100-hour moving averages are needed to increase the bullish bias. So far that has not happened.

• USDJPY: The USDJPY is modestly lower, but remains above the swing area outlined in the video prior to release. That swing area comes in at 157.23. The 100-hour moving average at 156.994 is also a level that would need to be broken to increase the bearish bias.

• GBPUSD: The GBPUSD has moved higher and has moved up to test its 100-hour moving average at 1.25125. However, buyers have not been able to push through that first target. It would take a move above that level to increase bullish bias at least in the short term.

A snapshot of the stock market nine minutes after the rate decision:

• Dow industrial average up 146 points versus a gain of 120.36 points just prior to the decision
• S&P index -5.92 points versus -11.64 points just prior to the decision
• NASDAQ index -7.7 points versus -37.37 points just prior to the decision

In the US debt market yields are down a couple of basis points 11 minutes after the rate decision:

• 5.001%, -4.4 basis points versus 5.0206% just prior to the decision
• 4.678%, -4.5 basis points versus 4.697% just prior to the decision
• 4.636%, -4.8 basis points versus 4.651%, just prior to the decision
• 4.737%, -5.1 basis points versus 4.744%, just prior to the decision

The market sees 32 basis points of cuts vs 30 bps before the release

This article was written by Greg Michalowski at www.forexlive.com.