EUR/USD: We expect a break of 1.2500 sooner rather than later. The pair remains heavy, showing people are not even close to as short as they would like to be. Stay short and add on moves towards 1.2640-50 with stops at 1.2700. Month-end flows may provide some support but we doubt it will be enough for EURUSD to turn bid.
GBP/USD: Cable rebounded above 1.6160 yesterday only to turn around immediately after the FOMC. Sell rallies to 1.6020, the Asia high, targeting 1.5900.
USD/JPY: bulls cheered the FOMC move yesterday – the end of QE being the first pillar of this trade. Buy on dips to 108.70/80, the trendline from mid-October that has held very well so far.
NZD/USD: Kiwi sold off 225 pips from yesterday’s highs. Take some profit here but remain core short and add on rallies towards 0.7850, targeting a re-test of 0.7700.
UBS