Plenty of good trade set ups for FED meeting today

What Happened Yesterday

The USD edged higher on Tuesday, underpinned by solid U.S. data, and headed toward its strongest monthly performance since February.

The USD Index touched its highest level of the day in early trading following the concurrent release of U.S. and Canadian data showing solid labor costs for the United States and disappointing growth and inflation readings for its northern neighbor.

U.S. consumer confidence rose to a nearly 17-year high, housing price data was solid and the Chicago purchasing managers index exceeded expectations, showing the economy continued to expand.

The Canadian dollar lost more ground after GDP data came in -0.1% versus forecasts of +0.1%. The CAD fell to 1.2915 as the data supports recent Bank of Canada cautions on potential slow downs in the Canadian economy from recent rate hikes.

However, the USD was unable to hold onto solid gains for the day as traders were wary of holding positions ahead of upcoming central bank meetings by the Bank of England and the U.S. Federal Reserve, as well as economic data due to be released later this week featuring the U.S. nonfarm payrolls report.

Sterling made solid gains as it broke through resistance at 1.3225 on the back of positive sentiment stemming from Brexit negotiations. It had a solid move hitting a high of 1.3294 and pushed EURGBP down to 0.8765. That now sets up a bullish market in the lead up to the BOE meeting tomorrow.

The USD did manage a sizeable gain against the Yen, rallying to 113.75 after the Bank of Japan kept its monetary policy steady on Tuesday, as widely expected, while slightly lowering its inflation forecast for the current fiscal year.

Today’s Fundamental Drivers

There’s a good range of economic data today but I think it’ll be pushed aside as traders await the FED Statement,

Technical Set Up – What’s Happening with the Majors

There’s been a few isolated moves on the majors as local data impacts. The NZD & CAD in particular have had sharp upmoves on the back of economic data releases.

AUDUSD

Downside trend trading perfectly. Looks set for big move to downside.

Check our detailed AUDUSD Analysis

NZDUSD

Bit of a relief rally after stronger than forecast employment data. It should continue lower once that momentum fades.

Check our detailed NZDUSD Analysis

USDJPY

Back into the range but potential for significant move to topside.

Check our detailed USDJPY Analysis

EURUSD

Downtrend in play but sideways into the FED. Huge potential for move to downside.

Check our detailed EURUSD Analysis

GBPUSD

Positive Brexit news has GBP charging to topside. BOE in focus.

Check our detailed GBPUSD Analysis

USDCHF

Steady as she goes but big potential for topside move.

Check our detailed USDCHF Analysis

USDCAD

Upside move continues as Canadian data comes in weak.

Check our detailed USDCAD Analysis

Today’s Focus – Major Currencies in Play

You need to follow the economic data releases & best technical set ups to work out where the majority of action and interest will be.

AUDUSD

Technical Set Up: Support @0.7628 & Resistance @0.7675

Fundamental Driver: FED Statement

Potential Strategy: Downside in play. Trade with the Trend.

Check our Next Best Trades list for full details.

EURUSD

Technical Set Up: Support @1.1636 & 1.1590 – Resistance @1.1667

Fundamental Driver: FED Statement

Potential Strategy: Downside Trend in play. Trade with the Trend.

Check our Next Best Trades list for full details.

Summary

Today’s FED meeting comes at the perfect time with minimal geopolitical events and great technical set ups on a number of the major currencies.

I think we’ll see predominantly sideways trading into the FED release with all the trading to occur straight after.

If we get a hawkish tone out of the FED then we’re going to see some great moves.

Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!

Brad

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