The Big Picture

• The dollar held its biggest gain in seven months versus a basket of its peers after Federal Reserve policy makers signaled interest rates could rise sooner and faster. Yellen said Fed could start raising interest rates around six months after its current asset purchase program ends. Central-bank officials estimated the benchmark rate target will be 1% at the end of 2015 and 2.25 percent a year later. Policy makers also reduced monthly bond-buying by $10 billion to $55 billion. The Fed discarded its 6.5% unemployment threshold for considering when to raise the Fed Funds rate and said it will look at a wider range of data.

• The New Zealand dollar weakened after data showed nation’s economic growth slowed in the fourth quarter and to 0.9% in the fourth quarter from a revised 1.2% percent in the July-September period.

• The UK unemployment rate remained unchanged at 7.2% in January, while jobless claims fell more than anticipated in February. At the same time the Bank of England published the minutes of its 5-6 March meeting. Policy makers said that the appreciation of sterling puts downward pressure on inflation and there is risk of further increases as the economy recovers. Later in the day, the Chancellor of the Exchequer George Osborne presented the UK budget to the House of Commons. He said that the economy continues to recover and recovers faster than forecast. He also said that the Office for Budget Responsibility revised up its forecast for economic growth.

• The People’s Bank of China lowered its reference rate to 6.146 per dollar, the weakest level since Nov. 6 and the yuan fell for a fifth day.

• Brent crude price rose on Thursday after the U.S. Federal Reserve meeting. In addition, geopolitical tensions also supported prices.

• West Texas Intermediate traded at the highest price after U.S. government data showed that inventories dropped for a seventh week, at the delivery point for benchmark crude contracts. In Asia crude oil prices were flat after overnight gains.

• Gold prices eased further in Asia on Thursday following the Federal Reserve’s announcement.

• On Thursday, the Swiss National Bank meets to decide on interest rates; there’s virtually no question that it will leave rates along and maintain the EUR/CHF floor at 1.20.

• In the US, the initial jobless claims for the week ended on March 15 are forecast at 322k vs 315k the previous week. That would bring the four week moving average slightly down to 328k from 330.5k. The Philadelphia Fed business activity index for March is forecast to rise to 3.2 from -6.3 in February, while the Conference Board US leading index for February is estimated to have slowed to +0.2% mom from +0.3% mom in January. The existing home sales for the same month are expected to be down 0.4% mom, after declining 5.1% mom in January.

• Three Speakers are on Thursday’s schedule: The Bank of Japan Governor Haruhiko Kuroda, the ECB Executive Board member Sabine Lautenschlaeger and the BoE monetary policy member Martin Weale.

THE MARKET

EUR/USD

• EUR/USD collapsed on Wednesday, after Federal Reserve policy makers signaled they’ll probably raise interest rates by the middle of next year. The pair violated two support barriers in a row but the decline was halted by the lower boundary of the upward sloping channel and the 1.3810 (S1) support. A rebound near that area followed by a break above the resistance of 1.3850 (R1) will keep the rate within the upward sloping channel and may target once again the highs of 1.3965 (R3). On the other hand, a clear dip below the lower boundary of the channel and the 1.3810 (S1) support may be a first indication that the short term uptrend has ended. The MACD oscillator obtained a negative sign, confirming the bearish momentum of the price action.

• Support: 1.3810 (S1), 1.3770 (S2), 1.3715 (S3).

• Resistance: 1.3850 (R1), 1.3893 (R2), 1.3965 (R3).

EUR/JPY

• EUR/JPY remained supported by the 200-period moving average and the blue uptrend line. An upward violation of the 142.35 (R1) resistance would confirm the rebound and may trigger extensions towards the next hurdle of 143.80 (R2). On the downside, a break below the blue trend line and the support of 141.00 (S1) may pave the way towards the 139.15 (S2) bar. The MACD, although in its bearish territory, crossed above its trigger line, confirming the inability of the bears to drive the battle lower, for now.

• Support: 141.00 (S1), 139.15 (S2), 137.55 (S3).

• Resistance: 142.35 (R1), 143.80 (R2), 145.15 (R3).

GBP/USD

• GBP/USD also fell after the FOMC decision. The pair moved below the 1.6600 barrier and met support at 1.6520 (S1), near the longer term uptrend line. The outlook seems mixed, since the price follows a short-term downward path, but in the bigger picture, it remains supported by the longer-term trend line. I would maintain my neutral view until we have more indications about the forthcoming direction. The MACD oscillator, already in a bearish territory, crossed below its trigger line, confirming the strengthening bearish momentum of the price action.

• Support: 1.6520 (S1), 1.6465 (S2), 1.6380 (S3).

• Resistance: 1.6600 (R1), 1.6700 (R2), 1.6760 (R3).

GOLD

• Gold fell below 1354 and moved lower to reach the support at 1332 (S1) and the 200-period moving average. A break below that level may signal a short-term reversal and have larger bearish implications. Nonetheless, since the RSI exited oversold conditions and is pointing up, an upward wave cannot be ruled out, maybe to challenge the 1354 (R1) as a resistance this time.

• Support: 1332 (S1), 1310 (S2), 1290 (S3).

• Resistance: 1354 (R1), 1392 (R2), 1415 (R3).

OIL

• WTI continued moving higher and reached the resistance of 100.75 (R1). A clear break above that obstacle may confirm that the 3rd-18th decline was just a 50% retracement of the prevailing uptrend and may trigger bullish extensions towards the next resistance at 103.00 (R2). The price confirmed the positive divergence between our momentum studies and the price action, while the MACD entered its positive territory, indicating positive momentum for the price action.

• Support: 98.00 (S1), 96.50 (S2), 95.00 (S3).

• Resistance: 100.75 (R1), 103.00 (R2), 105.00 (R3).