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.
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.
Whilst US PPI data didn’t reach expectation the fact it was higher than the last count helped to lift the US$. The US$ index has yet to reclaim the 92.50 resistance level though so, as suggested before, watch this level for any new make or break. However, the nimble nature of the short term TC trading system though meant that some FX reversal moves were harnessed for decent Risk/Reward trade gains.
The Cable is just 200 pips away from the key 1.35 S/R region and this level, in turn, is just below a major bear trend line marking a potential 3,000 pip triangle breakout region. August was choppy for trend traders but September has opened up a treat and the Cable might be about to add to the abundance!