US$ bounces up off key 100 level. Focus shifts to FOMC

The US$ dipped below the 100 level but recovered to bounce back up from this major S/R level and, no doubt, this region will remain in focus until next week’s FOMC. Whilst FOMC will be the main event watched by traders there are several major news items for the GBP and so the GBP/USD and other GBP-based pairs will be in focus as well.

NB: I am away this w/e so any updates will be brief.

USDX 4hr: dipped below 100 but quickly recovered. There is a bit of a Bull Flag style pattern setting up now ahead of next week’s FOMC.

Gold 4hr: this is still within a descending wedge and hovering near the daily chart’s 61.8% fib. This is a classic chart for all of those Fibonacci skeptics! Just check how price action has gravitated to this key fib level for much of the last three weeks. FOMC might be the news event to trigger a break away move:

4 hr TC Signals: there were two signals yesterday but, in true form for this period of FX Index divergence, these were rather disappointing. The A/U reversed after just 20 pips and the Kiwi after just 70. The FX Indices are truing to shift back into alignment but, for the time being, they remain divergent. These periods of divergence are characterized by better trading off 30 min charts during the European/US session and for giving poor performing 4hr trend signals. This observation has been spot on this week!:

A/U 4hr: no follow through and the signal closed off:

Kiwi 4hr: little here either and the signal is trying to close off.

USD/TRY 30 min: the 30 min charts still offer the best trading during FX divergence. There was an 800 pip spike move here after the 3.40 was reclaimed and with little draw-down:

Other Forex:

EUR/USD: the 1.045 level is back in focus following the latest ECB update. This pair fell after it was announced that the asset purchase timeline would be extended:

E/U weekly:

E/U 30 min: lots of spike  action around the ECB news event:

GBP/USD: this pair is setting up within a triangle ahead of next week’s busy agenda: there is GBP CPI, Employment data, Retail Sales and a BoE rate update to come next week.

G/U weekly:

G/U 4hr:

USD/JPY 4hr: this pair is still consolidating under the daily chart’s 61.8% fib and is another chart for the Fibonacci skeptics! I would not be surprised if this pair stayed like this until next Wednesday’s FOMC!

AUD/JPY: I still consider that this breakout move will try and target the 89 level but, for now, the monthly 200 EMA is giving this pair some grief. This could be another pair whose fate depends on next week’s FOMC; U/J flows might drag this pair along for whatever ride might be in store:

A/J weekly:

A/J 4hr:

GBP/JPY: ditto here. This is also consolidating within a 4hr chart triangle and USD/JPY flows might impact this pair with FOMC news. Watch also with all of the GBP news items:

G/J weekly:

G/J 4hr:

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