FX movement has been fairly limited ahead of the much-anticipated FOMC and I suspect this uneasy-quiet might continue until the data release. Trend traders might be wise to wait until after this news item before trying to catch any decent new trend trade.
The US$ hasn’t moved that much but there have been a number of decent trend line breakout moves across FX pairs. In fact there were 6 breakouts with 5 giving good TC signals as well. I’d thought it might be quiet in the lead up to FOMC but, not so.
Last week: There were some big moves with GBP pairs last week and this has helped to develop the mean reversion profile across some FX charts; a phenomenon I have been monitoring for many weeks now. This movement helped to trigger a number of great trend line breakout trades and decent TC signals as well. There is FOMC in the coming week and so I’ll be watching to see how this impacts the mean reversion trends in play and, also, to see if it triggers any new trend line breakout trades.
The US$ remains pegged by 92.50 resistance but printed a bullish-reversal ‘Inverted Hammer’ candle for the week. There is FOMC this week and so this might help to decide the fate of the next move for the index.
I cast my eye first over the economic calendar this morning, noting the upbeat US CPI and weekly jobs data, and thought this would have lifted the US$ over the 92.50 but was surprised to see this was not the case. 92.50 is proving to be very effective resistance for the US$ index and remains the level to watch with Friday’s US Retail Sales. The GBP has taken off following the BoE hint of a rate hike and this triggered a number of new trend line breakout moves.