Video: Technical Breaks from S&P 500, GBPUSD and Others a Fed Trap
• The S&P 500 cleared the top end of a three-week wedge and a few USD-based majors marked tempting breaks
• With the FOMC rate decision Thursday, all Dollar and 'risk'-oriented markets will be set on a hair-trigger
• Outside the long reach of the Fed, a few standouts are staging fundamental and technical setups like the GBP
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The market made a last minute bid to tempt traders in before the Fed detonates fundamental conviction and volatility with its policy decision. A range of risk-oriented assets climbed this past session but few were as seductive as the S&P 500 which nudged the upper bound of a three-week consolidation pattern aimed at reversing the mid-August collapse. From the technician's perspective, it is a distinct pattern and slow break that might look like a clean setup. The same chart-based logic can be applied to a range of Dollar-based majors that made technical moves (GBPUSD, AUDUSD, USDCAD). However, the risk underlying these setups is severe. The FOMC rate decision is dead ahead, and there is genuine debate over whether the group will hike or not as well as significant pre-announcement positioning. While there are some avenues that may escape the gravity of this event - GBPCAD and AUDNZD amongst others - the broader market is watching with held breath. We take stock of the market heading into this critical event risk in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.