The FOMC meeting last night provided no clarity on when the Fed might raise rates in the US. The comments from Dudley the previous day were quickly ignored and most Forex Pairs made up some of the ground against the dollar. Dean shared his thoughts on the meeting and where we might find some opportunities.
Dean's Daily FX Update – 18 August 2016
In the EURUSD, we are back up to the resistance line which we put in place a little while ago and it will be interesting to see how the price reacts at these levels. Currently around 1.1320 and some suggestion that the MACD is flattening, stochastics showing heavily overbought and bit of divergence emerging.
In Cable, Sterling has also made up some ground against the dollar and approaching the 100% Fibonacci level we put in place. Dean is not a fan of trading GBPUSD at the moment but his bias would be to be selling into any of the rallies.
The AUDUSD, there appears to be a short-term triple top forming and Dean will be watching how the price reacts. Approaching a major high that has been in place since April but there may be a little more to go before we start to see this FX pair come back.
The Kiwi, is showing signs of divergence already and a double top forming at our resistance levels. A similar setup to the AUDUSD and we need to be patient before entering into any shorts. That is Dean’s preferred trade but let it come to you and don’t try and force it.
USDJPY is now below the 100 levels and at a major support level. Traders will be looking to see if the Bank of Japan will intervene at this level and push the market back up. They have a record of getting involved to avoid too much strength in the currency but is this the level?
It seems that all the forex pairs we have been covering over the past few months are at pivotal levels against the USD. The best advice is to be patient and watch how the price reacts at these levels. A solid bounce may signal a change in polarity.
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