Ben Bernanke's last throw of the dice... Will he roll sixes?

The day has finally arrived and patience will be smalls further tested as punters await this afternoon when Federal Reserve Chariman Ben Bernanke speaks. Will he or won’t he has been the question not only in recent days but equally so in recent months. We all know the answer in recent months, however tonight may prove to be a seminal moment in the Fed’s history and more importantly in Ben’s tenure as "chairsatan". Not only is the issue of whether they announce more quantitative easing (QE) important for markets and the next direction for the USD, but it has potentially now more than ever become a real political landmine as we edge ever nearer to the US presidential election in November. VP in waiting, Paul Ryan as well as Presidential candidate Mitt Romney have made their feelings on Ben’s performance more than crystal clear in recent weeks and should they win, he is sure to be given the chop as a legacy pledge for what they consider to be Obama’s fiscal ineffectiveness. So potentially in Ben’s mind, there is no real downside in announcing another round of QE as his days may well be numbered and if anything, once (if) given the chop he can at least show off another feather in his cap (and CV), proudly proclaiming that he did all he could given the constraints while at the helm of the Fed. In truth however the above and any other research you read on the topic is mere speculation at this point as we will only definitively know when Ben tells us how it is.

In his best effort to date to telegraph the Fed’s intent WSJ journo d’jour Hilsenrath yesterday penned an article (worth a read) where he outlined the likely scenarios and potential permutations and combinations of what the Fed may or may not do and the likely impact of these variations on markets.

News overnight, mainly led from the southern hemisphere where the Reserve Bank of New Zealand left rates untouched and remained dovish in guidance in a vain attempt to shoot the bird (local currency) lower. Over the pond, NZ’s big brother took a small hit as Moody’s downgraded the sunshine state of Queensland (Australia), which saw the little battler (AUDUSD) tumble smalls, but not far enough to actually prove anything directionally. Otherwise... all quiet on the western front (love a good cliché).

Moving on, is there anything else really worth talking about?
Well I suppose there is, in so far as levels are concerned.

EURUSD: A purported 1.2900 digital option expiry should keep the pair smalls bid above while further SNB recycling has capped any move above 1.2930 for the time being. Yes, I know, many have claimed Fibo levels and the like as the key reason for slowing growth in the pair, but when a sovereign is selling... well a sovereign is selling... Till tonight, keep your pillows handy.

AUDUSD: Attempting to do something impressive... thus far, epic failure. On the day stops sit under 1.0425 and offers start showing themselves into 1.0480/1.0500.

GBPUSD: Don’t care about QE here! There I said it, and what’s more I’ll say I still like the Cable higher. The first hurdle is of course 1.6180, but the real target is 1.6230 at the current pace of developments. The downside doesn’t have much by way of stops, but support comes in around 1.6080 and more formidable around 1.6030/50.

USDJPY: Everyone now calling and waiting for intervention. Love a good intervention play, don’t you? Bottom line, she still trades heavy and that’s the way it should be. Topside, 78.30 is a fade opportunity, then again I think we have the Fed tonight, don’t we?

USDCAD: A lot has been written about this pair of late, so I won’t. We all know that IMM CAD longs are at extremes, USDCAD shorts are overdone yada yada yada... Stops and offers litter the topside into 0.9780 and then further out into 0.9830/50.

EURGBP: The short version is, I like the idea of fading this puppy into 0.8050, stop above 0.8130 to be safe before trailing.

Nothing more to write, nothing more to say. Well, not entirely true, I’ve got plenty to say but not much of it is fit to print.
Thus I bid you good luck and as always, helmets on!