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

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

 
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