Dollar Down After Fed; Euro, Risk Pairs, Metals Rally

Article originally published on and republished here with permission

Believe those who are seeking the truth. Doubt those who find it. ~ Andre Gide

Good morning. Dollar’s decline continues as Fed says interest rates are likely to stay near zero through late 2014. Therefore, euro, risk pairs and metals rallied big-time – as seen on the charts below. Important events in today’s FX Calendar are: Core Durable Goods, Initial Jobless Claims and New Home Sales

USD Index

Now that support around 79.50 has been breached and the buck is testing session lows, it’s not a good idea to buy dips but rather consider new selling opportunities with stops above former support zone and/or yesterday’s high.

USD Index Chart Daily 1-26-2012USD Index Chart Daily 1-26-2012


The breakout scenario mentioned yesterday occurred after Fed’s rate decision and now it’s time to expect former resistance at 1.3050 to provide support on dips.

EURUSD Chart 4hrs 1-26-2012EURUSD Chart 4hrs 1-26-2012

On the daily chart there’s a long tailed candlestick formed yesterday, suggesting that recovery is still strong and pullbacks are finding decent bids.

EURUSD Chart Daily 1-26-2012EURUSD Chart Daily 1-26-2012


Silver provides another nice breakout setup so it’s best to keep an eye on this resistance around 33 which is being tested at time of writing

Silver Chart Daily 1-26-2012Silver Chart Daily 1-26-2012


As I stated before, AUDJPY is one of the main pairs EURUSD is following right now. 83 is getting closer, acting like a magnet, so no matter what you’re planning to do – be that selling on strength or buying more on the potential breakout – it’s best to wait until this level will be tested, probably a matter of hours.

AUDJPY Chart Daily 1-26-2012AUDJPY Chart Daily 1-26-2012


EURGBP is back at resistance zone after a short visit to the downside where it found bids yesterday. As said two days ago, I think it would be a good bet to buy on the potential breakout higher – targeting .8500/25

EURGBP Chart Daily 1-26-2012EURGBP Chart Daily 1-26-2012


AUD is facing resistance around 1.300 so it is still a good idea to keep an eye on 1.2900 which has a good chance to break soon

AUDNZD Chart 4hrs 1-26-2012AUDNZD Chart 4hrs 1-26-2012


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