EUR/USD Tests 6-Week Trend as SNB Meddles with EUR/CHF
- EURUSD tests strength of trend since December 17.
- NZDUSD breakdown eyes move towards 0.7100.
- See the DailyFX Economic Calendar for Thursday, January 29, 2015.
Traders are grappling with a seemingly contradictory FOMC statement, the RBNZ's neutral pivot, and potential SNB intervention. The lack of central bank transparency has been quite shocking in the first month of the year, and there are few indications that the recent pivot in policy signaling will abate any time soon.
The US Dollar rally, US equity markets sell-off, and the slump in US yields highlights this perceived confusion. Irrespective of price action after the FOMC (in particular, the flattening of the long-end of the yield curve), it's evident that policymakers in the United States are looking past the recent decline in domestic and foreign inflation pressures (out of their control), and are instead focusing on the positives at home (in their control): the improving labor market and the now "solid" (from "moderate") rate of growth.
See the above video from technical considerations in EURUSD and NZDUSD.
--- Written by Christopher Vecchio, Currency Strategist
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