The FED policy meeting did not produce new important developments. In line with expectations, the central bank left the interest rate unchanged and did not tweak its bond purchase program. Analysts are pouring over language of the statement, looking for hidden meanings and secret messages. Markets quickly discounted nonsensical commentaries, such as "slightly more dovish FED stance" and treated the announcement as it was – a non-event. Currencies barely responded, making it one of the least memorable policy meetings in recent months.
About an hour later, the Reserve Bank of New Zealand concluded its policy meeting. The RBNZ also made no changes, leaving the official cash rate at 2.5%. In strong contrast to the earlier announcement, however, currencies became more active. Not broadly, but the New Zealand Dollar had a sharp boost, jumping about 60 pips versus the USD and a proportional distance in relation to other currencies. The central bank sees economic growth during 2013, expecting inflation to return to its 2% target. Traders must have taken these words as an indication of possible hike in the OCR later in the year, which resulted in a good-size advance for the Kiwi.
[Related -Chicago Fed: Slowest US Growth In Nearly 3 Years]
I avoided trading in the currencies directly affected by today's announcements and looked for opportunities somewhere else. As discussed yesterday, the AUD-CAD pair indicated more downside on the hourly chart. Indeed, there was bearish move through the support level, triggering my sell order at 1.0458. This not a fast moving pair, so my objective was reasonably small, too. The AUD-CAD touched my target of 40 pips on the bid, failing to fill my "take profit" order. By the end of the day, I settled for 32 pips gain with no regrets.
[Related -Has The Fed Already Lost?]
Currently, I do not see really promising chart set ups, of the type I typically focus on. While waiting, I will straddle the latest range on the hourly chart of the EUR-JPY. Preferably, I would like to see the price dip again to the support at 123.00 and rebound slightly. That would confirm the support, making a stronger case for a well-established range. Of course, that will become academic if the price rallies above 123.90. In either case, I will be seeking a result of 60 pips.