The Majors looked prepared to break lower heading into Wednesdays FOMC minutes release. Just the opposite occurred after the minutes revealed a much less confident tone from the FOMC members. The idea of further easing was passed around with little objection during the last FOMC meeting. This spooked dollar bulls who had anticipated a wait and see tone to the minutes. It will be interesting to see if these results produce a follow through in Asian and European trading. I will be watching the AUDUSD for a break above 1.0530 and the NZDUSD at past resistance at .8140 for price action clues. In European trading the EUR PMI result is due. This result will be closely watched due to its impact on interest rate decisions. As always, remeber to keep your trades KEANE and play it safe.
EURUSD STEADY CLIMB THIS WEEK
The EURUSD followed the herd and slipped higher after the FOMC minutes were released. The cross made short work of the 1.25 level and now has its eyes set on the 125.60 level. Things are beginning to become interesting with this pair. Heading into Thursday’s trading it will be all about a hold of the 1.25 level. A move back below that price will open up the 1.24 level once again.
When we look at the pair on a daily chart the EURUSD appears to be in a triangle. The top of the triangle is created by a declining daily trend line from last October. The bottom of the channel is created by an ascending trend line that has guided the pair higher over the last month. The pair appears ready to test the triangle confines sooner than later.
Keane Plan: Watching price action around 1.25. A hold favors 1.2560 and a break pushes the pair back towards 1.2440
GBPUSD THE NEW SAFE HAVEN
The GBPUSD hovered around the 50 Fib from last May’s decline for most of the last 24 hours. Then after the release of the FOMC minutes the pair crushed any doubters regarding its recent accent. The GBPUSD closed trading in New York above resistance at 1.5850. The Pound has been benefiting from flows inflows from Europe. It will be interesting to see if this trend continues. The 1.5850 level will be the price to watch heading into Thursday trading. A hold exposes the .618 fib from May’s decline at 1.5904 a break below places support at the 50 fib at 1.5782.
Sup 1.5782 (50 Fib)
Res 1.5904(618 Fib)
Keane Plan: Watching the pivot at 1.5850 for a tell regarding at test of either the 50 or 618 fib.
AUDUSD U TURN WEDNESDAY
The AUDUSD day was split in two. In Asian and European trading the pair looked set to break below trend line support. The only thing seen holding the pair up was confirmation of a wait and see attitude from the FOMC. After the release of the surprising FOMC minutes the cross steadily moved higher to test recent highs. All in all, not much has really changed, the pair is still sitting in the same range as Tuesday. Support is still in the 1.0435/25 support zone and resistance is still around 1.0530. If today’s highs hold the pair also created another lower high.
Keane Plan…Watching the price action around 1.05. Without a follow through the pair could retrace.
NZDUSD NOTHING TO SEE HERE
The NZDUSD pushed higher with commodity currencies following the FOMC. similar to the AUDUSD the NZD cross is still in its range. The pair tested the .8140 at the 4hr close but was quickly turned back. A break or hold of this level will dictate Thursday’s price action. A push above .8140 opens up the .8230 area and hold could lead to another test of .8060.
Res .8140 .8235
Keane Plan : Watching the .8140 level for hints
USDCAD ENDS THE DAY WHERE IT BEGINS
The USDCAD broke above resistance at .9910 to start the day. The pair moved up to test the .9950 zone before giving up the majority of its gains into the finish of New York trading. Heading into Thursday price action around .9910 will be telling for risk in general. A hold exposes .9950 and a break below open the pair up to a retest .9860.
Keane Plan: Watching price action around .9910
USDJPY BODY BLOW
The USDJPY was hit hard on Wednesday following an unexpectedly dovish FOMC Minutes. The USDJPY had been moving in anticipation of higher treasury yields out of the USD following diminished expectations for further QE. The minutes dampened this hypothesis but it should be noted that the August Minutes were created before the recent batch of positive USD data. In the short-term Support is at 78 and resistance starts at 78.70 followed by 79.15.
Keane Plan: Standing in the sidelines at the moment.
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