Yesterday, the FOMC 2-day meeting ended without any interest rate hike. Instead, Yellen suggested that the FOMC is unlikely to increase rates for at least a couple of meetings, which means probably till the second quarter of 2015.
As a result, the USD was significantly supported and maintained its strength.
While, the euro, as other major currencies, traded lower against the USD. The impact of the FOMC statement is expected to continue throughout the day.
The EUR/USD is most likely to find (R) Resistance & (S) Support at the levels mentioned below:
S2 S1 Pivot Point R1 R2
1.2154 1.2290 1.2350 1.2410 1.2560
We have a couple of financial releases today. The German IFO Business Climate Index is scheduled for release. It rates the current German business climate and measures expectations for the next six months. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers.
Ø Forecast:105.4
Ø Previous:104.7
A higher than expected reading should be taken as positive for the EUR, while a lower than expected reading should be taken as negative for the EUR.
While from the UK, the Retail Sales will be released. It measures the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
Ø Forecast:0.3%
Ø Previous:0.8%
A higher than expected reading should be taken as positive for the GBP, while a lower than expected reading should be taken as negative for the GBP.
Moving forward to the U.S., the Philadelphia Federal Reserve Manufacturing Index, to be released, rates the relative level of general business conditions in Philadelphia.
A level above zero indicates improving conditions; while below it indicates worsening conditions.
The data is compiled from a survey of about 250 manufacturers in the Philadelphia Federal Reserve district.
Ø Forecast:26.6
Ø Previous:40.8
Disclaimer: The prices and news mentioned in this outlook are absolutely no guarantee of future market performance. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.
Engaging in CFDs or Spot FX carries a high risk to your capital. You should not engage in this form of investing unless you understand the nature of the Transaction you are entering into and the true extent of your exposure to the risk of loss. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based.