Risk appetite improved a bit during the US session: for stocks it was based on some positive earnings and for FX it seems due to a weaker USD.
The main risk event in the next 24 hours is the FOMC statement. This has the potential to trigger a strong swing in the USD and so traders need to be careful around this news release. I am still pondering an outcome where further USD weakness could trigger a classic style ‘risk on’ rally.
USDX: this index is still struggling under the resistance of the monthly trend line. FOMC is the next risk event here and traders will be watching to see if this news triggers any new directional move for the index.
EURX: looks to be getting a bit excited here about a potential move lower for the USD. Watch trend lines here for any breakout move after FOMC:
Gold: holding above fib support and seems to also be hoping for some more USD weakness:
Silver: also waiting patiently above $17 support:
S&P500 30 min: higher for the session and was ‘tradable’:
S&P500 daily Cloud: this will be the big test. Can the index make a new close and hold back above this resistance?
Forex: A cruel irony in these slow markets…..the few TC signal I had (that weren’t valid) are all in profit. I won’t be looking for new TC signals until after FOMC as it could be a game changer if the USD rallies. Yen pairs still have the BoJ interest rate news on Friday to deal with as well.
The 30 min charts during the London/US session are still offering the better trading opportunities for low risk high reward FX trading as these few charts show:
E/J 30 min:
A/U 30 min:
A/J 30 min:
4hr charts update:
E/U: higher on the back of USD weakness.
E/U 4hr:
E/U daily: the monthly 200 EMA seems to be the level to clear here for any bullish attempt:
E/J: the wedge breakout continues:
A/U: has broken above recent resistance:
A/U 4hr:
A/U daily: the 4hr 200 EMA seems to be the level to clear here for any bullish attempt:
A/J: wedge breakout continues here too:
Cable: has broken out of the daily wedge which is a HUGE achievement. This wedge has been in place for almost 4 months. It is struggling however at the next level of resistance from the weekly 200 EMA. Any close and hold above that would be further bullish support though and this would support the bullish ‘inverse H&S’ I’m seeing here:
Kiwi: keep and eye on the 0.80 level. Interest rate news still to come here this week as well:
Kiwi 4hr:
Kiwi daily: the 0.80 level and then the weekly 200 EMA look like the hurdles to navigate here for any bullish effort:
U/J: marking time ahead of FOMC:
GBP/JPY still above the 173 level:
Loonie: the breakout didn’t get going and so I’ve relaxed the trend lines. Price is now pulling back a bit as the USD weakens:
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