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USD comes back to life after FOMC meeting

Four key markets in focus today.

USD/JPY

It is a big day for the pair as the USD comes back to life on the back of the FOMC meeting. The Fed came in less dovish than what the market was positioned for and highlighted that the recent fiscal drama only marginally impacted the overall assessment of the economy. USD/JPY spiked to 98.68 and will be in focus, with the BoJ also due out later today. While the BoJ isn’t really expected to add to stimulus, its language will be important and it might use this opportunity to talk down the yen and push USD/JPY higher. The pair is stuck in a triangle pattern at the moment which seems to be tightening up now and this would lead to a break higher/lower in the short term. The triangle consolidation pattern has been in place since July.

National Australia Bank

NAB has become the second of the big banks to report a record profit this week and saw its FY cash profit rise 9.3% to $5.94 billion, roughly in-line with estimates. Net income rose to $5.45 billion (from $4.08 billion) and boosted its final dividend to 97 cents.  While the result wasn’t quite the blockbuster posted by ANZ, it should be enough to push NAB shares higher today, particularly with the surprise dividend. NAB shares pulled back yesterday and today could see it challenge the week’s highs at 37.07. Unlike its peers, NAB is still substantially far from its all-time high and this could encourage some value hunting. Near-term support is at $35.

Facebook

The social network’s shares were up 17% in after-market trade today on the back of its third-quarter results. Revenue jumped 60% to $2.02 billion, beating estimates of $1.91 billion. FB shares hit $58 and were drastically sold off all the way down to $48.66. It’ll be interesting to see how the stock reacts upon reopening later today. The $50 level will be the price to watch in the near term.

AUD/USD

The pair has been declining most of this week and has been hit by some dovish RBA comments along with renewed US dollar strength. AUD/USD is just below 0.95 early in Asia and locally we get building approvals data today with a 2.9% rise expected. We also have import prices and private sector credit due out. Any misses on this data could see the pair break its overnight lows at 0.944.

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