The Greenback found consolidation through the day’s trade, as many stood on the side-lines today following the Fed’s hawkish rhetoric. The DXY continues to trade in a tight range, the fashion has been evident across the majority of FX pairs. with lack of direction coming alongside the Jewish New Year Holiday. Politics is the theme this week, with elections expected in Germany and New Zealand over the weekend and much focus on PM May’s Brexit talk in Florence.

GBP trade has been slow, with anticipation on UK PM May’s Brexit speech, likely due in the early afternoon tomorrow. A primer for this event is available on the RANsquawk headline feed Titled: “PRIMER: UK PM Theresa May to deliver Brexit speech on 22 Sep 2017” EUR/USD is a pair that has managed to gain some ground back against the dollar, as bids were found around September 5th low, but does remain firmly in the 1.1860 – 1.2050 level.

AUD has struggled; not helped by outperformance in its major pairs, with the rampant greenback yesterday, alongside more positive polling results for the NZ national party, supporting the Kiwi. AUD saw initial weakness from Lowe’s comments, noticeably commenting on the clear risks in the Australian economy. Further news impacted AUD later in the session, with a key export partner, in China, being downgraded by S&P, possibly affecting future trade. AUD/NZD trades just around previous resistance seen in July, looking for a break into this range once again.

The safe haven currencies have continued to lose ground through trade, with the exception of USD/JPY, coming back off key resistance around 112.70 / 112.80, where many had touted profit taking levels for some long positions.


Dollar Index H4

On Sunday we had price coming down to MS2 for a double bottom and then on Monday we observed market moving sideways with the top of the range at the resistance level where price came off of earlier today and the bottom of the range at MS2. Market remains sideways and price has failed to break out of the top of the range with our H4 stoch currently overbought. Range trading strategy tells us that price is expected to move back down to the bottom of the range.

US10Y H4

Price found support at the target of MS1 and in a bearish market was sold at the 21 EMA and made it's way down to the weekly target, which we said was likely seeing as bulls did not buy at WM2. All very straight forward stuff. Some profit was taken earlier in the session and role reversal resistance at WS1 is in play. Pivot theory tells us that price is not likely to move lower than the weekly target and so we expect WM1/ WS2 to hold. Therefore be aware of this when buying Yen pairs and selling Gold.

S&P500 H4

Price has not made a higher high all week though price has not made a lower low either. Support in the highlighted green zone is holding, with price sitting on the 21 EMA at the time of writing this post. As long as indices aren't bearish and treasuries aren't bullish, markets remain risk on. One thing to note is the VIX, currently at 9.65 - a level where we often see volatility come into the market so as mentioned on the US10Y plan, be aware of this when buying Yen pairs or selling Gold at current price levels.

One thought on “FX Market Wrap: Markets slow and investors digest the Fed”

  1. Rana Haq says:

    Thank you for fx wrap. On GBPUSD today, I was thinking of fib move but it was up in American session, but I realize it was at support too. I have noticed it make changes on direction daily currently this makes choosing bias confusing.

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