Yesterday was a big day in forex. Three central banks presented us with their plans for the next few months and I bet all of them believe they hit a nail in the head. The RBNZ (Royal Bank of New Zealand) was the last to present us with their policy for the nearest future term, which remained unchanged. Following two large central banks, such as the BOJ and FED, no one expected them to have a great impact besides a small tumble in the NZD pairs.
The BOJ and the FED, on one hand, shook up the forex market and shuffled some of the major forex pairs. After some hesitation, the market started unloading some USD long positions when the FED left the interest rates unchanged. This morning, the second leg of the upward move is taking place as the European traders enter the market. The European session was over yesterday when the FED announced their plans, so now they want a piece of flesh too, don´t they?
As I type, EUR/USD is in the 1.1230 region and I have this gut feeling to open a short term forex signal. The USD selling might not be over yet, but it appears like this move might be exhausted right now and a retrace might follow soon. Ok, I just opened a sell forex signal. I couldn´t resist.
The Japanese Yen, on the other hand, is not taking advantage of the US selling this morning. Even yesterday in the evening when the FED sent the USD 50 pips down, the JPY didn´t make any advances against the Buck. The 100 support level in this USD/JPY remains intact and the price action is not signaling a continuation of yesterday's surge in JPY pairs. Regardless, I think we must wait a little longer to see if the sentiment reverses in USD/JPY before we embark on a buy trade in this forex pair.