USD Trading Outlook (18-12-2013)

Currencies

• The euro (EUR) rebounded back up to 1.3769 from 1.3723 yesterday against the dollar. Resistance for the single currency stands at 1.3780 and 1.3797.

• The US dollar (USD) has depreciated against the Japanese yen (JPY), trading around 102.97, down from 103.87 on Monday. The dollar will be put to the test today as the upcoming FOMC statement and conference is likely to shed light on the future of US monetary policy and the supply of the dollar.

Equities

• US stocks have retraced as the US500 (SPI) reach 1783. The upcoming statement by the FOMC will indicate dollar supply conditions. A potential early tapering of monetary policy could indicate at lower equity values.

Commodities

• WTI Crude (OIL) is currently trading at 97.68 dollar per barrel, up from 96.25 some days ago. Look ahead for crude oil inventories data being released this afternoon.

Mover & Shaker with FX Options

• Gold (XAU) has seen mixed trading over the short term as investors anticipate today’s FOMC statement. The price of gold has fluctuated from 1252 to 1227 dollar per ounce over the last 24 hours.

• Options Traders expecting a pick-up in volatility due to the FOMC statement will be constructing Straddle strategies on Gold.

• The Straddle is constructed by purchasing and at-the-money Call option and an at-the-money Put option.