The FOMC was less-dovish than expected and this led to a strong USD rally whilst earlier in the session, the BOE was more dovish than expected, which led to a sharp sell-off in the GBP. This of course is really good news for cable bears with last year’s lows at 1.5260 now breached.

There is nothing of note on the economic calendar today during Asian trade and we will again depend on flows and official comments for volatility.

The weekly cable chart (see chart) has now broken its longer term wedge pattern as well as last year’s lows and it looks like we’ve returned to the long term bear trend. Selling rallies back towards 1.5500 looks like a sensible strategy. With central bank policy tending perhaps in opposite directions, this pair could be one of the big movers over coming weeks.

EUR/USD has rejected yesterday’s highs and posted new short-term lows making the bear case reasonably strong. There is decent technical support near 1.3260/70 with a 61.8% retracement (1.30/1.37) as well as the 55-day MA which has been a reliable indicator recently but a break below there opens up the downside for a move to 1.3060 (see chart).

EUR/GBP should continue to rally on the back of the weak pound and the technical break above .8715. Buying dips back towards short-term support around .8640 (see chart) looks like the play here.

USD/JPY took a back seat for the first time in a while with heavy orders either side of the market proving to be very strong indeed. I’d play a .9200/.9450 range here whilst the crosses arere adjusting.

Some of the Yen crosses, particularly GBP/JPY, are starting to play catch-up with the market looking at other currencies to sell. EUR/JPY is still in consolidating mode but I’m expecting the lower end of the pennant formation (see chart) around 122.00 to be tested first.

The AUD/USD technical resistance level at 1.0375 held again and the odds seem to favour a downside test of barriers and bids near 1.0200.

Good luck today.