Euro, British Pound Consolidate Gains After Dovish FOMC Sparks Rally (Euro Open)

Euro, British Pound Consolidate Gains After Dovish FOMC Sparks Rally (Euro Open)
2009-03-19 05:19 (UTC)

The Euro and the British Pound consolidated in narrow ranges in overnight trading after an unexpectedly dovish statement from the US Federal Reserve triggered a US Dollar selloff, pushing EURUSD and GBPUSD sharply higher. Switzerland’s Trade Balance and ZEW survey of investor confidence are on tap in European hours.

Key Overnight Developments

• Australian Annual Car Sales Lowest in 7 Years

• Japan May Inject Capital into Failing Companies, Says LDP Chief

• Euro, British Pound Consolidate After FOMC Sparks Rally

The Euro and the British Pound consolidated in narrow ranges in overnight trading after an unexpectedly dovish statement from the US Federal Reserve triggered a US Dollar selloff, pushing EURUSD and GBPUSD sharply higher.

Market Commentary

MARKET COMMENTARY ON 19TH MARCH 2009

GBP/USD closed higher on Wednesday and above the 20-day moving average crossing at 1.4139 confirming that a short-term low has been posted. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing at 1.4620 is the next upside target. Closes below today's low crossing at 1.3875 would confirm that a short-term top has been posted.

EUR/USD closed sharply higher on Wednesday as it extends this month's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the 50% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CHF closed sharply higher on Wednesday and above last week's high crossing confirming that a low has been posted. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the 50% retracement level of the December-March decline crossing is the next upside target. Closes below the 10-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CAD closed sharply higher on Wednesday as it extends Monday's breakout above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed sharply higher on Wednesday and above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. Closes below the reaction low crossing would renew this year's decline.