After testing the upper range of its resistance Gold has slunk back to a middling mid-term value that it has essentially traversed since July of 2013. The precious metal is in the midst of well known bear market. Its price as of this writing is 1253.00 USD. Before the weekend Gold climbed to nearly 1280.00 per ounce but since reaching these heights has met a steady amount of short-term pressure.

The U.K. released Preliminary GDP numbers today and they met expectations with a result of 0.7%. Core Durable Goods and the CB Consumer Confidence will come from the States later. Quarterly earnings will continue from the States today and some of the highlights will include DuPont, Ford Motor, Pfizer, and Yahoo. However while investors on the surface stir from the above data and reports it is tomorrow’s FOMC Statement and press conference with Janet Yellen at the helm which has the attention of all. It should be mentioned that U.S. President Obama will deliver a State of the Union speech tonight, but his credibility being what it is per most current polling his words are likely to fall on frustrated and ‘deaf’ ears. Wall Street has certainly mirrored an air of nervousness the past few trading sessions as have all international bourses.

Monetary policy continues to be a focal point for both traders and investors because the Fed’s direction remains a highly complex puzzle to solve. Currency markets have taken on a cautious tone. The EUR has come off of its highs and is near an important support level short-term. The GBP also has fallen back to support levels, but continues to operate within the highest values of its range as it maintains numbers not seen for a year and a half. The JPY has gotten stronger and is traversing one month support levels versus the USD, but the official Japanese policy of a weaker JPY cannot be forgotten quite yet. FX in general is likely to take on a consolidated mode as market participants begin to sit on the fence awaiting tomorrow’s Fed Statement.

For those with strong stomachs and willing to take positions the biggest question is what will the Fed do. Based on recent data from the States, Digital Markets Advisor believes the Fed will try its best to take the middle ground once again. It will likely say that it continues to see growth, but it knows that the economic landscape remains challenging. It may offer up an additional tapering but if so it is unlikely to be an amount that is staggering. The job of the Fed – though not an official mandate – is to help maintain stability in the markets and offer optimistic banter that can be sold to the masses. The major currencies are all at important junctures. The EUR and GBP have been strong since early November. A Fed that shows caution may allow these currencies to gather more steam, a Fed that delivers a message that it is more serious about how its wants to taper in an aggressive manner would likely make the USD stronger. Digital Markets Advisor expects a cautious Fed.

In what will be her first appearance at the podium tomorrow for a FOMC Statement as the Fed’s Chairwoman, Janet Yellen has taken over one of the toughest jobs on the planet and has not been exactly been given an easy environment to work. In fact she steps into a position of responsibility that some might say a rather large mess has been left for her to clean up. The jobs of traders and investors is to figure out how she will take care of business in the short and long-term. Given Ms. Yellen’s positions and known pronouncements throughout the past few years, it is expected that she will try to carefully nurse what has been Fed policy since the crisis of 2008.