The Fed announced that it will launch a new $400 billion program to rebalance its $2.87 trillion portfolio, called Operation Twist; selling shorter-term notes and using those funds to purchase longer dated Treasurys. This means there will be no quantitative easing, no money printing, so stocks and commodities sold off and sent the buck higher.

Usd is rising significantly across the board, and we expect this price action to continue in days ahead, where any solid pull-backs should be offer an opportunity to catch the trend. We like commodity pairs, especially Usd/Cad for more upside.

Technical analysis for Eur/Usd:

Eur/Usd sold-off sharply yesterday, once prices filled the open gap from Sunday. A downside reaction is very strong and it could be part of a some aggressive and much larger bearish structure. In fact, s pair as we can see is trading very close to the lower support line of a trading channel, where a break and daily close will confirm a wave 3) scenario, with 1.3230 targets in play.

Yesterdays high at 1.3794 is now a critical invalidation region!

Forex Analysis by Gregor Horvat at ForexPros. com.