The Fed left rates unchanged and the accompanying statement largely unchanged, with the addition of â�,��"substantialâ�,� to describe the housing slowdown. There was an initial reaction down into daily pivot, towards our resting bids in EUR/USD when they heard â�,��"no change,â�,� but we were a little too deep to get filled on the initial reaction. Once they heard â�,��"substantial,â�,� EUR/USD rocketed higher to clear 1.3280 stops. As I mentioned earlier today, EUR/JPY well above 155.00 clearly explains USD/JPY's lack of any real reaction to the downside.

With this afternoon's developments, wave 3 appears to be underway with a minimum target of 1.3345. The probable target is just above the 1.3365, B-wave highs before wave 4 retraces to setup wave 5 of 5 to the final 1.3445 target. The anticipated, but simplified, wave structure is drawn on the right hand side of the chart.

For tonight, let's look to get long on a shallow retracement into the 1.3260-70 zone with stops under 1.3240 for the breakout towards the 1.3345 minimum wave 3 target.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.