Last week: There were a number of trend line breakouts last week but the moves were choppy. Whilst last week’s FOMC and / or this weekend’s German Election may be feeding into this uncertainty I also note many FX pairs are at MAJOR monthly-chart based S/R levels. These strongly respected Support and Resistance levels may continue to play havoc with the charts until they are either decisively respected or rejected.
The US$ remains under pressure and below 92.50 resistance despite a hawkish Fed and up-beat US data which begs the question ‘What is it going to take to push the US$ higher?’. There is a bit of high impact data next week, starting on Sunday, so watch to see if any of these items get the index moving. There is also the ongoing North Korea tension to navigate as well.
There was more upbeat US data overnight, from the Weekly Unemployment claims front, and yet the US$ still can’t make it back above the 92.50 S/R level. Some GBP strength relative to AUD, JPY and NZD weakness helped to trigger some trend line breakout moves on the cross pairs but other FX pairs remains a bit choppy with this indecisive US$
There was hawkish Fed rhetoric but the US$ is still below the 92.50 S/R, for now at least. This remains the level to watch for any new make or break.
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.