The day after the FOMC rate decision will have the ECB rate decision to ponder.

The EURUSD whipped around yesterday, closing the day modestly lower after the FOMC kept rates unchanged. The USDJPY also traded higher and lower, and true to the pattern, the GBPUSD has moved up and down in volatile trading as the market concluded the FOMC is steady for now.

Today, the USD is mixed in those three major currency pairs with the EURUSD and GBPUSD lower modestly (higher USD). The USDJPY is lower (lower USD).

The ECB will announce its rate decision at 8:15 AM ET. The central bank is expected to cut rates by 25 basis points to 2.9% from 3.15%. The press conference with ECB’s Lagarde will start at 8:45 AM.

For the EURUSD technically, the price is trading above and below the 38.2% retracement of the move up from the January low to the January high. That level comes in at 1.03968. Current prices are also below the 50% midpoint of the move down from the December high at 1.0403 (the 50% of the trading range since 2022 is also near this area at 1.0405).

So the range between 1.03968 and 1.0405 is the key barometer for buyers and sellers through the rate decision and the press conference. Move above and stay above is more bullish. Conversely, move below and stay below is more bearish.

As always there could be increased volatility as the market digests all the information.

The USDJPY moved lower overnight. Eamonn pointed out that there is talk of a meeting between Japan’s Prime Minister Shigeru Ishiba and President Trump in Washington on February 7. Eamonn speculated that there might be some currency discussion between the two, a lower dollar and a higher yen would be a win for each of them.

Technically, the USDJPY yesterday tried to extend above the 100 hour MA during the FOMC volatility, but quickly backed off and remained below that key barometer for traders (bearish). The price fall in the Asian session, took the price below the 38.2% of the move up from the December low. The swing area between 154.77 to 154.94 was also broken with the price trading to a new low to start the US session. That area will be a key barometer for buyers and sellers. Staying below is essential if the sellers are to keep in control. If the price moves back above that would not be good for the sellers in the USDJPY.

On the downside, the 50% of the move up from December stalled the fall on Monday (from the sharp stock selling). KEY TARGET. That is a key target at 153.736. The swing area at 153.26 to 153.46 is another target to aspire toward with more downside momentum.

For the GBPUSD, the price is waffling above and below the 100 hour MA and the 50% of the move down from the December high near 1.2453 area. The price is currently below that level at 1.2443, but the price is not running. Yesterday, the GBPUSD ended the day little changed as traders don’t seem inspired in either direction. At some point, there will be a realization, and using 1.2453 as a barometer is as good as any (there are two technical levels in that area), but traders need the shove/the catalyst for the move. Right now, they are searching (or so it seems).

The Fed kept rates unchanged with some nuanced changes on inflation. They removed reference to progress, focusing instead on inflation remaining elevated, signaling potential ongoing concerns, but that was swept away by the Chair saying it was a “language cleanup”. Yields are lower today and ended the day yesterday with yields lower at least out the curve. The levels at the close yesterday showed:

• 2-year 4.219%, +1.5 basis points
• 5 year 4.339%, -0.5 basis points
• 10 year 4.536%, -1.3 basis points
• 30 year 4.778%, -1.2 basis points

In the US debt market today, yields are moving lower.

• 2 year yield 4.201%, -2.5 basis points
• 5 year yield 4.304%, -5.1 basis points
• 10 year yield 4.494%, down 6.1 basis points
• 30 year yield 4.734% down -5.6 basis points

US stocks are trading little changed/mixed in premarket trading implied by the futures

• Dow industrial average is trading down -53.52 points after falling 136 points or -0.31% yesterday
• S&P is trading up 7.19 points after falling -28.29 points or -0.47% yesterday
• Nasdaq is up 56 points after falling -101.26 points or -0.51% yesterday

After the close yesterday, Meta, Microsoft and Tesla reported along with IBM, and Lam Research also reporting:

• Meta Platforms Inc (META) Q4 2024: EPS $8.02 (BEAT; exp. $6.77), Revenue $48.39B (BEAT; exp. $47.03B). Shares are up 1.08% in premarket
• International Business Machines Corp (IBM) Q4 2024: EPS $3.92 (BEAT; exp. $3.75), Revenue $17.54B (MET; exp. $17.54B). Shares are up 8.21% in premarket
• Lam Research Corp (LRCX) Q4 2024: EPS $0.91 (BEAT; exp. $0.88), Revenue $4.29B (MISS; exp. $4.31B). Shares are up 6.% in premarket
• Microsoft Corp (MSFT) Q2 2025: EPS $3.23 (BEAT; exp. $3.11), Revenue $69.6B (BEAT; exp. $68.78B). Azure and other cloud services revenue growth of 31% (MET; exp. 31%). Shares are down -4.22% in premarket
• Tesla Inc (TSLA) Q4 2024: EPS $0.73 (MISS; exp. $0.75), Revenue $25.71B (MISS; exp. $27.21B). Shares are up 1.64% in premarket

A sampling of the earnings from today shows mixed results:

• Sherwin-Williams Co (SHW) Q4 2024: EPS $2.09 (MISS; exp. $2.06), Revenue $5.30B (MISS; exp. $5.32B).
• Altria Group Inc (MO) Q4 2024: EPS $1.29 (MET; exp. $1.29), Revenue excluding excise taxes $5.11B (MISS; exp. $5.40B). Shares are down -0.30% in premarket
• Comcast Corp (CMCSA) Q4 2024: EPS $0.96 (BEAT; exp. $0.86), Revenue $31.62B (MISS; exp. $31.64B). Shares are down -1.12% in premarket.
• Blackstone Inc (BX) Q4 2024: EPS $1.60 (BEAT; exp. $1.46), Revenue $3.08B (MISS; exp. $3.84B). Shares are up 2.25% in premarket.
• L3 Harris Technologies (LHX) Q4 2024: EPS $3.47 (BEAT; exp. $3.42), Revenue $5.52B (MET; exp. $5.55B). Shares are up 2.97% in premarket
• Northrop Grumman Corp (NOC) Q4 2024: EPS $6.39 (MISS; exp. $6.35), Revenue $10.69B (MISS; exp. $10.91B). Share are down -0.33% in premarket
• Quest Diagnostics Inc (DGX) Q4 2024: EPS $2.22 (BEAT; exp. $2.19), Revenue $2.26B (MISS; exp. $2.25B).
• Southwest Airlines Co (LUV) Q4 2024: EPS $0.56 (BEAT; exp. $0.44), Revenue $6.93B (MISS; exp. $6.96B).Shares are down -2.69% in premarket
• Caterpillar Inc (CAT) Q4 2024: EPS $5.14 (BEAT; exp. $5.02), Revenue $16.2B (MISS; exp. $16.39B).Shares are down -3.11%
• PulteGroup Inc (PHM) Q4 2024: EPS $4.43 (BEAT; exp. $3.27), Revenue $4.7B (BEAT; exp. $4.46B).Shares are up 4.91%
• Cigna Group (CI) Q4 2024: EPS $6.64 (MISS; exp. $7.82), Revenue $65.68B (BEAT; exp. $63.36B). Shares are down -8.84% in premarket

In other markets today:

• Crude oil is trading down $0.15 or -0.19% at $72.45
• Gold is trading up $21 or 0.76% at $2779.60
• Silver is trading up $0.25 or 0.91% at $31.10
• Bitcoin is trading up $1200 at $104,987

On the ecoomic calendar today, the highlight is the 1st look at Q4 GDP. The Atlanta FedGDPNow growth estimate came in at 2.3% down from 3.2% after inventory and trade data took a big chunk out of growth.

• 8:30 AM (USD):

  • Advance GDP q/q: Forecast 2.6% (Previous 2.8%).
  • Unemployment Claims: Forecast 220K (Previous 223K).

• 10:00 AM (USD):

  • Pending Home Sales m/m: Forecast 0.0% (Previous 2.2%).

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