An action that they may look to do is possibly raise the discount rate by 25 basis points in the attempt to take further abnormality out of the market. On February 18th the Fed raised the rate to 0.75% and the spread to the target Fed Funds rate rose to  0.5%. That was the spread that existed from August 2007 to February 2008. Prior to that the spread was “normally” at 1.0%.  Should the Fed decide to raise the discount rate to a spread of 0.75% it might be thought of as just another step toward normalcy.

The last time the Fed did raise the dollar rose on the news.

THE GBPUSD has continued it’s push higher reaching a high of 1.5182 in the process. The pair has moved back down and has 1.5151 now as intraday support for the pair. 

There was a triple high off the hourly chart at 1.5194.  The high for the week extended to a high of 1.5206. The high from Friday came in at 1.5216.  All these levels are target levels to the upside.

The high for the week is 1.3777.  The high last week was 1.3796. Longer term the resistance remains at the 1.3852-1.3873 area (see chart below).

Greece removed from watch list of S&P.

The data this morning supports that notion as well. Manufacturing Sales rose by 2.4% vs 0.6% expected with the prior month also higher at +1.9%.

He also said will continue with stimulus until the end of the next fiscal year. The fiscal year ends at the end of March.

The 100 day MA is at 90.11 today. THe midpoint of the move down from the Feb 19th high to the low comes in at the 90.13.  The 200 hour MA come in at 90.14. The area should find support.  A break below, however, may lead to some liquidation as the market has tested the 100 day MA on a number of occassions now and eventually, it tires and gives way.

The 1.3735 level was the high from March 3rd.  Yesterday, the market stalled at this level before giving way and moving lower. Today, the price is back up testing this level.   The high reached in the last few minutes found sellers against the level and we have seen the price rotate back down.  The 1.3691 level will continue to be watched below where the 100 hour MA and the old highs and lows through March have increased the importance of the level.   1.3704, the high from March 8th is also a level to watch below. 

The FOMC rate decision is later today. That and perhaps the London fixing at 12:00 noon today will cause some fireworks (there is some talk that EURGBP may be pressured and this may keep a lid on the EURUSD).  At the moment we are just range trading.