The Federal Reserve ends its first two-day meeting of the Federal Open Market Committee (FOMC) since Chair Jerome Powell was confirmed as the central bank’s head in early February. Market pricing suggests a 95% chance of an interest rate rise taking the target range for the federal funds rate to 1.5%-1.75%, up 0.25% from the current target range of 1.25%-1.5%. This would bring the effective fed funds rate up to around 1.63%, the highest since September 2008.
USD/JPY has been very much sideways for five weeks. The key to direction today is the one-month upper-channel trendline at 106.90/107.00. Short positions need stops above 107.30. A break above here is an important longer-term buy signal this week and should see us hold above 106.90/80 on any pullback that follows.
There is minor support at 106.15/25 but a move below 106.00 re-targets 105.65/60 before support at the 105.28/23 low. We see strong support at 105.00/104.90 but long positions need stops below 104.70. A break below here is an important longer-term sell signal.
EUR/USD remains in a narrow sideways trend as we recovered Friday’s losses on Monday, then lost it all and more yesterday. Failure to beat quite strong resistance at 1.2315/25 targets 1.2300/1.2295 and 1.2256, then a low at 1.2237.
The key to direction is strong support at 1.2175/65. There is no more important level this week but long positions need stops below 1.2135. You must, however, be ready to reverse into a short on a break lower, targeting 1.2090/80 and 1.2045/35.
There’s minor resistance at 1.2280/85 but strong resistance at 1.2315/25, the main challenge for bulls today. A break higher, however, re-targets 1.2355/60 then trendline resistance at 1.2375/80. Short positions need stops above 1.2410. A break higher is a buy signal.
AUD/USD meets minor resistance at 7735/40 but a move below here targets 7695/90, then minor support at 7670/65. The most important support of the week is at 7635/25. Try long positions with stops below 7585. Bulls are now in shock after significant losses, so gains could be limited. We have minor resistance at 7730/35, then stronger resistance at 7785/90. Short positions need stops above 7815.
For NZD/USD the best support of the week is at 7195/85, but long positions need stops below 7155. A break lower is a sell signal, seeing 7185/95 act as resistance targeting strong moving average support at 7120/10. A break below 7100, however, targets 7070 and 7030. Bulls need the pair back above 7195 for long positions at 7195/85 to start to work, targeting 7210 and resistance at 7230. On further gains look for very strong resistance at 7270/80.
USD/CAD topped six pips from key resistance at 1.3130/40. The first support is at 1.3050/45, with stronger support at 1.3005/1.2995. A break lower targets a buying opportunity at 1.2925/15, with stops below 1.2880.
The major longer-term trendline resistance at 1.3130/70 could see a high for the recovery at this stage. But short positions need stops above 1.3220.
GBP/USD tests good support at 1.4010/1.3995 and long positions need stops below 1.3980. The next target is at 1.3960, then a potential buying opportunity at 1.3940/30 (with stops below 1.3900). A move above 1.4040 allows a re-test of 1.4084/87. A move above 1.4100 targets the five-week high at 1.4144, then 1.4200/10.
The key to direction for gold is the rising 100-day moving average and 15-month trendline support now at 1306/05. Long positions need stops below 1298. A break lower is a sell signal initially targeting the 200-day and 500-week moving averages at 1291/89.
We topped just a point and a half from the first resistance at 1321/23. Short positions need stops above 1326. A break higher targets 1333/35, perhaps as far as 1339/40.
Silver has strong support at 1605/02, but long positions need stops below 1595. A break lower is a sell signal targeting 1588, 1583, 1575/74, perhaps as far as the December low at 1562/61. The first resistance is at 1626/28, then 1636/35. Strong resistance at 1646/49 is likely to see a high for the day if tested.
For E-mini S&P the first 23.6% Fibonacci resistance is at 2723/24. A break above 2731 targets quite strong resistance at 2739/41. Short positions here need stops above 2745. A break higher targets 2750/52, then resistance at 2764/66.
Failure to beat the first 23.6% Fibonacci resistance at 2723/24 targets 2714/12 (we bottomed exactly here yesterday) before good support at 2702/00. Long positions need stops below 2695. A break lower targets 2688/86 and trendline support at 2678/75. Long positions need stops below 2670. A break lower is an important sell signal.
E-mini Dow Jones has minor resistance at 24790/799 but a move above here targets 24870/880 before quite strong resistance at 24980/999. A break higher targets 25125, then 25190/199.
Failure to beat first resistance at 24790/799 targets 24710/720 and 24630/620 before the low this week at 24470/460. Very important 16-month trendline support at 24410/400 is then key to direction. A sustained break lower would be a sell signal.
Technical Analyst & Trader
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