US FED keeps rates on Hold, Dollar under pressure.

U.S. Dollar Trading (USD)

U.S. Dollar Trading (USD) fell broadly against most currencies as the FOMC kept rates on hold at 2.00% and disappointed dollar bulls in the accompanying statement. Markets were hoping for more inflation fighting rhetoric to help underpin the dollar moving forward. The statement was judged to be more growth orientated although recent high commodities did receive a mention. May Durable Good came in at expectations at 0.0%. New Homes in May fell 2.5% to 512K on revised April figures of 525K. In U.S. share markets, the NASDAQ was up 33 points (1.39%) and the Dow Jones was up 4 (0.04%). Crude Oil closed down $2.45 ending the New York session at $134.55 per barrel. Looking ahead, first quarter PCE expected at 3.5% and final 1Q GDP expected slightly stronger at 1%. Weekly jobless claims forecasted at 380K.

European Euro

The Euro (EUR) jumped higher as the market’s digested the FOMC statement and pared down US rate hike expectations. New Industrial orders came in strong at 2.5% much better then forecasts of -0.6%. ECB President Trichet reiterated his concerns on inflation and the possibility of a July interest rate rise. EUR/JPY was helped to record highs above 169. Overall the EUR/USD traded with a low of 1.5537 and a high of 1.5686 before closing the day at 1.5665 in the New York session. Looking ahead, German May import Prices expected at 1.4%

Japanese Yen (JPY)

The Japanese Yen (JPY) hit day lows after the FOMC announcement but rebounded as strong buying on the crosses supported USD/JPY. Overall the USDJPY traded with a low of 10767 and a high of 108.42 before closing the day around 107.91 in the New York session.

Pound Sterling (GBP)

The Sterling (GBP) made good gains against the weaker greenback but failed to keep up with the Euro. GBP/JPY continues to be well supported trading above 213.00. Overall the GBP/USD traded with a low of 1.9658 and a high of 1.9769 before closing the day at 1.9740 in the New York session. Looking ahead, the May Inflation report will be closely scrutinized.

Australian Dollar (AUD)

The Australian Dollar (AUD) tested the 0.9600 level after the FED news, once again in striking distance of the post float high of 0.9663. AUD/NZD continued to march higher as economic outlooks continued to diverge. Overall the AUD/USD traded with a low of 0.9533 and a high 0.9600 before closing the day at 0.9592.

Gold

Gold (XAU) fell inline with the drop in Crude Oil on reports of increased US stockpiles. Overall trading with a low of USD$874 and high of USD$889 ending the New York session at USD$886 an ounce.

Technical Analysis: Dollar Under Pressure

Euro (EUR)

Euro – 1.5670 : Initial support at 1.5461 (June 17 low) followed by 1.5303 (June 13 low). Initial resistance is now located 1.5687 (Jun 20 High) at followed by 1.5844 (Jun 9 high).

Yen (JPY)

Yen – 107.95 : Initial support is located at 107.12 (June 23 low) followed by 106.8 (Jun 12 low). Initial resistance is now at 108.61 (Feb 14 high) followed by 108.98 (Jan 14 high).

Pound Sterling (GBP)

Pound – 1.9740 : Initial support at 1.9580 (June 20 low) followed by 1.9471 (Jun 17 low). Initial resistance is now at 1.9791 (Jun 20 high) followed by 1.9852 (May 23 high)

Australian Dollar (AUD)

Australian Dollar – 0.9595 : Initial support at 0.9491 (June 20 low) followed by 0.9448 (June 19 low). Initial resistance is now at 0.9603 (June 25 high) followed by 0.9648 (Jun 9 high).

Gold (XAU)

Gold – 888 : Initial support at 858 (Jun 12 low) followed by 850 (Psychological Number). Initial resistance is now at 908 (June 20 high) followed by 909 (June 9 high).