Forex: USD could slowly grind higher after Fed - DailyFX

FXstreet.com (Córdoba) - Risk appetite surged putting the USD under pressure ahead of the Fed monetary policy decision. In this regard, Christopher Vecchio, Currency Analyst at DailyFX, notes that today is a particularly interesting day, considering that expectations for a new QE package are exceptionally high. "Consensus forecasts are calling for the Fed to implement a $45 billion/month outright Treasury purchase program to replace Operation Twist. When combined with QE3, the agency MBS program announced in September, the Fed's balance sheet would be on pace to expand by $85 billion per month, bringing the Fed's balance sheet to over $4 trillion in 1Q'14", he explains.

When considering what happened after QE3 was announced and when considering these FOMC trading day statistics, Vecchio argues that it's possible that we see the US Dollar bottom after a reactionary low, and we see a slow sideways/upside grind higher, like we did in late-September and October. "With a number of the major currencies reaching key resistance levels, both the fundamentals and the technicals may be aligning for a pullback in risk-appetite for the rest of the week".