USD remains the weakest of the majors going into the FOMC decision
The USD was the weakest of the majors at the start of the NY session, and although the dollar has rebounded off low levels in the NY morning (and into the early afternoon), the greenback remains the weakest of the majors. The AUDUSD remains the strongest of the majors.
Some technical levels to eye for the majors:
- EURUSD: The EURUSD reached a new swing high taking out the high from last week at 1.13833 (the high reached 1.13887). However, the price has retraced back toward a swing area on the daily at 1.13229 to 1.1347 (see post from earlier today). A move below that level - and the 100 hour MA not far from the low point at 1.1319 - would open the downside for more downside momentum. Absent that, and the traders will be gunning for the highs this week.
- USDJPY: The USDJPY has moved below a swing area at 107.309 to 107.359 and stayed below over the last 5 hours. Stay below keeps the bears more in control. The next downside targets include the low from last week at 107.069, the swing low from May 15 at 106.85. The swing low from May 13 at 106.735. On a move back above 107.359, watch for a move above the 107.45 level. That is the 200 bar MA on the 4-hour chart. That level may be a key barometer that will give buyers more confidence.
- GBPUSD: The close yesterday for the GBPUSD came in at 1.2726. The London low was at 1.2727. If the price can move below that level look for more selling with a cluster of support defined by the 100 hour moving average at 1.2689, the 38.2% retracement of the move up from the Thursday low at 1.2686, the 200 day moving average at 1.26734 and a upward sloping trendline on the hourly chart at 1.2666 as downside targets to get to and through. On a move higher, getting and staying above the 1.2800 level, opens up the door for a move toward a downward sloping trendline on the daily chart connecting highs from December 2019 to highs from March 2020. That level comes in at 1.2836.
- USDCAD, AUDUSD and NZDUSD. All the "risk on" pairs remain on the dollar weak side of the 100 hour MA. For the USDCAD, the pair tested its 100 hour moving average currently at 1.34262 and found sellers after a brief break. It will take a move above to solicit more buying and tilt the bias more in the favor of the US dollar. For the AUDUSD, it is above its 100 hour moving average at 0.6974 (trades at 0. 7010). A move below that MA is needed to tilt the bias to the downside. Until then, the buyers are in control. The NZDUSD is above it 100 hour moving average at 0.65144 (trades at 0.6548). A move below that moving average would be needed to tilt its bias lower.
In other markets 20 or so minutes before the FOMC decision:
- spot gold is trading down about $0.90 or -0.05% at $1714.42
- WTI crude oil futures has shrugged off the larger than expected build and trades higher by $0.20 or 0.51% at $39.13
US stocks are trading mixed with the NASDAQ higher and the S&P and Dow industrial average down on the day:
- S&P index -5.11 points or -0.16% at 3202.06
- NASDAQ index +55.2 points or 0.55% at 10008.42. The all time highs 10028.61 reached today
- Dow is down about 100 points or -0.37% at 27173.50
