Fed Doesn't Disappoint But Will Dollar Weakness Continue

Anticipation is finally over and the markets, well they aren't quite as pleased as we thought they might be, maybe technicals are weighing on them too much, we did spike higher today but it did tail off. Maybe I am just a little to pessimistic possibly they will push higher still (they will if all retail traders are short) but we seem to be hitting technicals a little too perfectly.

So the Fed announced QE3 to steal Kathy Lien's commentary "$40 billion worth of mortgage-backed securities on a monthly basis with no expiration date, there’s no going back as the floodgates are officially open". (Definitely an individual you should follow and read).

With regards to our positions on the announcement of QE3 we closed all remaining open positions to book the profit, we then looked for opportunities out of the aftermath, we think the Fed really pushed hard this time (and possibly won the election for Obama), that said everything is pointing to an over bouught situation and although I think we can go higher by year end, it feels like we are now due a pull back in some form,
The good thing about risk events such as today is that it normally gives us a good indication to market momentum ad some nice entry singnals.

EURUSD
Given the QE hopes today the Euro pushed higher, I do wonder how long for though and therefore our strategy remains the same, to look for buying opportunities on a pull back. We now sit at the 1.3 level which many have called for as a level to sell from; I would rather wait for a good entry signal and therefore Bearish signals above 1.3 0 on a daily close or Bullish signals towards support then I will look to enter the market.

GBP/USD
Similar to the Euro, pushed higher on QE but didn't manage to really hold onto gains.

AUD/USD
Bit repetitive but given the risk on / risk off nature Aussie was similar to the Euro and Pound, we still like this for a pull back and our short term strategy stands with stops above 1.0550/1.060 within the descending triangle.

USD/JPY
Interesting situation with the dollar yen. We like this for a push higher and it bounced nicely off of our lower resitance (bar some volatility). This doesn't really fit with the wider market but this pair does offer the opportunity to enter long for a re-test of the upper bound of the descending channel.

Risk events such as today tend to give some good signals, the key is choosing the ones which don't look overbought or oversold and therefore have room to demonstrate a good risk reward.

USD/CHF
With trend pin but looking slightly over extended.

USD/SEK

GBP/CHF

EUR/AUD
Currently slightly above the 50% retracement mark.

CAD/JPY

GBP/JPY
We like this set-up, nice risk reward and doesn't look over extended.

AUD/JPY