3 USD Trades to Watch Ahead of FOMC Minutes
- USDJPY is bellwether of market; watch 108.00/25.
The US Dollar has retraced all of its post-NFP gains from Friday. What does this mean for the rally? It may not mean much at all if last week's highs can't be punched through in AUDUSD and EURUSD; the resistance is established as both the apex of price after major event risk (ECB, NFPs) and the opening range for the month.
Our focus on the USD-complex is split into two camps. First, USDJPY stands on its own, as the bellwether of the greenback rally since mid-August. The weakening technical picture, buttressed by the broadening wedge at highs, would be accentuated on a move below ¥108.00/25 this week. USDJPY may be due for a pullback after the market achieved our early-September price target of ¥110.
The other technical camp the US Dollar is in is represented by AUDUSD and EURUSD, two momentum/breakout trades for the past four weeks. Both of these pairs have respected their daily 13-EMAs during the course of their respective downtrends, and already yesterday and today we've seen price rally to those levels and turn back. The USDOLLAR Index is following a similar pattern.
See the video above for technical considerations and the ranges we're watching in AUDUSD, EURUSD, and USDJPY ahead of the FOMC minutes release tomorrow.
--- Written by Christopher Vecchio, Currency Strategist
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