FX: Fairly quiet ahead of FOMC by Mary McNamara

There hasn’t been a lot of movement today even with the BoJ news. Many are attributing this to Chinese New Year and that may well be the case. I still am blaming the USDX though and the lack of clear direction with the index but the next batch of US data to be released, including FOMC, might help to bring some clarity to this situation.

USDX 4hr: still ranging between the 95.50 resistance level and the 92.50 support BUT testing a bull trend line. USD Building Permits, PPI & FOMC are released during the Wednesday US trading session and may trigger a directional move on the index:

USDX4

TC Signals: the two TC signals are trading lower following BoJ news. The U/J had looked the better of the two signals this morning given that it was above the 4hr and daily Cloud back then. It is back in the 4hr Cloud now and so is holding little appeal for me. I had stressed it would be best to wait until after the BoJ BUT there was no supportive move following this news.

U/J: didn’t follow through after BoJ and so was best left. Price is now back in the 4hr Cloud. The signal is still open but not worth chasing at the moment:

UJ4

A/J: this signal hasn’t moved far but is below the daily Cloud anyway so not an ideal set-up to start with. Also not worth chasing at the moment:

AJ4

Other FX: I suspect that many FX pairs might just chop sideways until after FOMC. Traders are wanting some guidance about US interest rates and any further information about the timing of any rate increase will most likely feed USD movement and, in turn, movement with other FX pairs. One exception could be with GBP pairs given the batch of GBP sensitive data released prior to FOMC news.

E/U: I wrote a separate article about this pair yesterday suggesting this was looking like a possible ‘Bear Flag’. There hasn’t been any bearish breakdown yet but FOMC could change things here. I’m watching for any trend line breakout WITH increased momentum, either up or down!

EU4

E/J: no new signal evolved here and look how the 136 level has been a reaction zone…yet again!

EJ4

A/U: looking like a possible bullish ‘Double Bottom’ is still brewing here so watch for any reaction off 0.785, a recent S/R level. FOMC might prove a trigger here:

AU4

Cable: consolidating within a 4 hr triangle for now but there is ‘red flag’ GBP news tonight followed later by FOMC:

GU4

Kiwi: the bullish ‘inverse H&S’ looks to be evolving here, albeit very slowly. Remember that the target for this move is up near the previous S/R zone of 0.77. ‘Paint dry’ stuff for now but creeping there slowly. There is NZD PPI tomorrow morning but tonight’s FOMC could also impact here:

Kiwi4

 

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