In reaction to the Fed's decision not to taper QE, which weighed heavily on the USD, prompted market participants to scale back expectations of higher rates in the Eurozone, which saw the 1y1y EONIA swap rate fall sharply to its lowest level since early August, testing the 100DMA line in the process. Consequently, both EUR/USD and GBP/USD advanced to its highest level since late January as risk appetite returned. In terms of technical levels, supports are seen at the 30-day upper Bollinger level at 1.3490, 1.3453 (Aug 20th high) and then at 1.3399 (Aug 28th high). On the other hand, resistance levels are seen at 1.3660 (Feb 4th high).
Even though the pair finished the session sharply, GBP underperformed EUR throughout the session after the latest retail sales data from the UK failed to meet analyst expectations. The ONS said that drop due to sharp fall in food sales. Technically, support levels are seen at 1.6008 (Jan 18 th high), 1.5893 (Sep 18 th low) and then at 1.5886 (Sep 17 th low). On the other hand, resistance levels are seen 1.6182 (Jan 11 th high), 1.6255 (Jan 3 rd high) and then at 1.6380 (2013 Jan 2 nd highs).
Even though bond yields fell sharply in reaction to the Fed’s decision no to taper QE, the surge higher by EUR/JPY ensured that the pair finished the session higher. In terms of Japan specific commentary, BoJ board member Kiuchi said the BoJ's 2 year time frame is too short in meeting its 2% inflation target. Also, Japanese PM Abe instructed his finance ministry to include a 2-stage lowering of corporate taxes in economic stimulus measures that would kick in if the consumption tax is hiked in April as expected. Technical studies indicate that support levels are seen at 97.88 (Sep 19 th low), the Ichimoku Cloud base at 97.65 and then at 97.45 (Aug 29 th low). On the other hand, resistance levels are seen at 99.54 (Sep 16 th high), 99.98 (Sep 13 th high) and then at the psychologically important 100.00 level.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.