US dollar trading levels for the FOMC
The US Dollar Index outlook has turned positive after holding important Fibonacci support at 93.45/40. We are now holding above key resistance at 9360/65 for a confirmation buy signal, indicating the bull trend, which started in February, has resumed.
Bulls need a break above minor resistance at 9390/95 today for another buy signal targeting 9410, 9430/35, perhaps as far as 9461/65. A re-test of the May high at 9500/02 would not be a surprise. Bears are only back in control on a break below the June low at 9321.
For AUD/USD, failure to beat resistance at 7630/60 turns the outlook neutral/negative. On the downside we target 7600/7595, 7550 and 7520/15. On further losses look for 7495/90 and 7475.
Gains are likely to be limited if seen on the FOMC announcement, with first resistance at 7585/90 and strong resistance at 7605/15. It’s very unlikely but, if we see 7630/40, try short positions with stops above 7660.
The NZD/USD outlook is negative as we fail to beat strong Fibonacci resistance at 7055/60. Moves to the downside target 7020/15, 6995/90 and 6970 before support at 6950/45.
The first resistance at 7015/20 could hold a rally but obviously we have the best selling opportunity at 7055/60, with stops above 7075. An unexpected break higher, however, is a medium-term buy signal targeting 7120/30 and 7180/90.
The EUR/USD short-term chart shows a potential inverse head-and-shoulders bullish pattern. However, we only managed a 100-pip rally from the neckline break, when the measured target was at least twice that. I have seen an increasing number of failed head-and-shoulders patterns recently so I believe there is a good chance this one will fail too.
As you can see in the chart above, the pair is sitting on the neckline as we re-test it. Note how well the red 200-period moving average is working as resistance.
Holding below the 23.6% Fibonacci on the daily chart provides a more negative outlook as the slow stochastic starts to turn lower. There’s a good chance the two-month bear trend will resume, therefore, targeting 1.1720/10, 1.1680/70 and possibly as far as 1.1640/30 into the end of the week.
Bulls initially require a break above 1.1790/1.1800 to turn the outlook more neutral. A break above the 1.1840 recovery high then puts them back in control, in the short term at least.
For USD/CAD the key to direction today is strong resistance at 1.3030/40. A break above 1.3070 is a very strong buy signal, targeting 1.3130/40 and 1.3205, but further gains look likely as far as 1.3260/70.
Failure to beat strong resistance at 1.3030/40 targets 1.2990/80 and 1.2960, before support at 1.2935/25.
USD/JPY breaks above the 200-day moving average at 110.20 for a buy signal, initially targeting 110.65/75 (hit as I write). On further gains look for 111.05/10, the May high at 111.35/39 and perhaps as far as the six-month trendline resistance at 111.80/90.
Bulls must obviously hold the pair above first support at 110.25/15. A move below 110.00, however, is less positive and risks a slide to 109.70/60.
Technical Analyst & Trader
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