Are You Prepared for Today’s Session?

The U.S stock market traded mixed yesterday, ahead of the U.S FOMC meeting. Even though economic data showed that the U.S economy is slightly improving, it wasn’t enough to spark any rally. Existing home sales increased in the month of May, showing a result of 4.77 million. While the result was lower than analyst’s expectations, the news stimulated sentiment as yesterday’s result showed another month of improving data.

Another event that caught investor’s attention yesterday was Moody’s statement, mentioning that they are still classing the U.S as an AAA country. Even though they mentioned that the current deficit could cause problems if not dealt with in the future, investors were pleased with the result, something that was characterized by an increase in volume on bond purchasing.

From a technical point of view, the S&P500 is now trading around closely watched resistance after breaking its 200 day moving average.

Asian stocks increased during early morning hours led by techs. According Bloomberg news software maker Oracle Corp signaled that demand is picking up.

EUR/USD makes a sharp turnaround

On the Forex market the Dollar index continued to linger around recent levels, as currency investors are preparing for today’s important rate decision. On individual pairs, the EUR/USD presented a dramatic move, breaking key level of 1.4, after finding support on its 38.2% Fibonacci level. From a broader perspective, the chart now seems to be forming a cup and handle pattern, currently trading in the handle stage. A break of upper resistance will give a clearer picture and verify the completion of the pattern.

On other pairs, the GBP/USD continued to trade around recent highs while the USD/CAD closed the session just off trend line resistance. Another market mover was the USD/CHF, dropping to 1.0657, the major move came after the chart had formed a wedge pattern. The pair sold off during the session as sellers pushed the pair down to support of 1.0691. Decreasing bond yields also had an impact on the pair, as the movement in the bond market was negative for the Dollar.

Economic Data to Watch Out For

The U.S will clearly take center stage today as the Fed is expected to give its interest rate decision. While the decision itself shouldn’t divert from expectations, investors will be focusing on the Fed’s future plan and on their additional methods, including the selling of further bonds to stimulate the economy.  In addition the U.S is scheduled to release its New Home Sales and Durable Goods Orders. New Home Sales are expected to show an increase of 360.0k compared to last month’s 352.0k.

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