The US dollar sold off in response to the Fed’s lack of action, but it rebounded to close firmly before the weekend. For the week as a whole, it was mixed. The Australian and New Zealand dollars were the strongest of the majors, advancing 1.3%-1.4% against the greenback. They extended those gains on Friday, even though the dollar was firmer against most of the other majors.

The euro was the weakest of the majors, losing about 0.35% against the dollar. The pre-weekend loss of about 1.4% offset the earlier gains and a little bit more. The Swedish krona and Norwegian krone, like the euro, were higher for the week before Friday when they gave it all back. They finished the week down about half as much as the euro. Officials at the Swedish Riksbank suggested inflation may have bottomed, but they do not want to see the krona appreciated. Norway’s central bank is likely to cut rates in the week ahead to respond to slowing growth.

Before the weekend, the euro traded on both sides of Thursday’s range. It closed near its lows, but did not close below Thursday’s low, which would have been a stronger reversal pattern. The euro’s high of $1.1460 was just shy of the 61.8% retracement of the euro’s decline from the Chinese-induced spike on August 24 (~$1.1715) to the September 3 low (~$1.1087). A break of the $1.1230 area now would confirm that the euro’s advance since September 3 is over.

With the Fed on hold, attention may shift back to the ECB and the flexibility of its current asset purchase program. The euro has appreciated about 4% on a trade-weighted basis since the middle of July and the price of Brent is about 20% lower over the same period. Neither is particularly helpful from the ECB’s perspective.

The dollar approached the lower end of its recent range against the yen before the weekend, but recovered smartly, even though strength in bonds and weakness in equities often hold it back. The yen gained about 0.5% on the week. The dollar’s five-day average crossed above the 20-day average for the first time in a month. In order to lift the dollar’s technical tone, however, it needs to move back above the band of resistance seen between JPY120.80 and JPY121.35. While JPY119.00 held before the week, support in the JPY118.60-JPY118.80 area is more important.