Risk Squeezed higher once again on Tuesday ahead of the FOMC and BOE.  The majors are expecting the FOMC to announce either further QE, Extensions on Operation Twist or maybe and extension of low interest rates until 2015.  Any of these outcomes are possible but if the FOMC decides to wait before announcing further policy decisions we could reversal of the recent gains against the dollar in the majors.  The pairs the would be struck the hardest would be the commodity crosses against the USD that have advanced beyond the .618 Fib from last months lows.  The BOE minutes start things off Wednesday and could push the pair lower if any hints of further Asset Purchases or QE are suggested.  Heading into Asian trading I would watch the ranges and trend lines that have lead the majors higher.  A move back to the 1.26 area would attract buyers in the EURUSD And a break up to the 1.0220 zone could attract sellers in the AUDUSD.  Tomorrow should be an exciting day, so it may be wise to save your bullets to after the FOMC.  Except for playing any breaks in the GBPUSD after the BOE.  Remember to keep your trades KEANE and play it smart.

 

EURUSD SQUEEZING HIGHER

The EURUSD slid down to trend line support to start off trading on Tuesday then squeezed higher for the remainder of the day.  The cross has respected this trend line since the beginning of the month. Wednesday could be make or break for this trend.  Most market participants are expecting either the introduction of QE3 or an extension to operation twist with the FOMC announcement.  If the committee remains in a wait and see mode the markets will be disappointed.  Heading into Asian and European trading Resistance can be found at the day high near 1.2750 followed by the 50 fib a bit higher at 1.2784.  Support begins at the .382 fib at 1.2667 followed by trend line at 1.26.   The keys to watch for regarding a larger move after FOMC would be for a test and break of trend line support or push higher through the 50 fib.

SUP   1.2667                  1.26

RES   1.2750                  1.2784

GBPUSD MAKING A RUN AT THE 50 FIB

The GBPUSD rushed past the weekly high on Tuesday to test daily price resistance at 1.5750.  Just above this price rest the 50 fib from May’s declines at 1.5782.  These two levels combined create a strong resistance zone between 1.5750/82.  This level should be difficult to crack ahead of the BOE minutes and the FOMC on Wednesday.  Support can be found at the weekly lows around 1.5615.  A break of this level could lead to a rapid decline towards 1.5450.  News will dictate price action with this pair so it may be wise to react rather than anticipate any moves.

Sup    1.5615

Res     1.5750/86

AUDUSD FOUR STRONG DAILY MOVES HIGHER

The AUDUSD as been on a one way higher over the last four days.  The question has to be how long can this move last. With the FOMC announcement on the way this question is difficult to answer.  The cross has strong daily support at 1.0220.  This levels could attract sellers ahead of FOMC.  Support now begins at the .618 fib from May’s lows at 1.0140.  A break of this level could expose a run back towards parity.

Sup     1.0140                1.00

Res     1.0220

NZDUSD UP 250 PIPS IN LAST FOUR DAYS

The NZDUSD and the AUDUSD seem to trade in lock step these days.  Both pairs have jumped higher over the last four days and are challenging major retreacments from last months lows.  The last level of resistance is .80 before a return to the bottom of the consolidation zone at .8060 would be complete.  Resistance begins at the .618 Fib from the May lows at .7936. A break of either support or resistance could indicate the future price action.

Sup     .7936

Res     .80

 

 

USDCAD BROKE THE WEDGE LOWER

The USDCAD broke below major daily support at 1.02.  If the cross can remain below this level we could see a move to 1.0050 over the next few days.  In the mean time support can be found at 1.0140.  Resistance is on the trend line at 1.0260.

Sup     1.0135

Res    1.0260

 

USDJPY NOT MUCH SHACKING

Not much has changed with this pair over the last 24 hours.  The cross is still in a range and may very well just be biding its time ahead of the FOMC announcement tomorrow.    Play the range until it breaks.  support is down at 78.60 and resistance begins at 79.30.

Sup    78.60

Res    79.30

 

FOMC and BOE Trading Plan Video      http://wp.me/p2pFeJ-1GY