The Anatomy of Price Action Around a Rate Hike
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- This is the 3rd part of a 3-part series around the recent FOMC rate hike.
In part One on Tuesday, we looked at pre-FOMC price action setups.
In part Two on Wedneday, we followed price action during the FOMC rate decision.
This is part three (above): we take what we looked at in parts 1 and 2, and begin to build a plan.
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- The continued top-side breakout in USD has been profound, and this has filtered in across the FX-space in a variated fashion, with a pair like USD/JPY showing exuberant gains while that USD strength was a bit slower and weaker to show against a currency like GBP.
- For reactionary setups to yesterday’s USD-moves, we looked at support elements in both GBP/USD and NZD/USD; both of which may have a longer-term bullish theme at-play. Yesterday’s spike of strength in the Greenback has helped to bring both of these setups down towards support; and this could offer continuation-based entries.
- On the side of USD-strength, the move in USD/JPY has been undeniably attractive. After testing the 115.00 level recently, USD/JPY is running up to fresh-highs around the 118.50 level, which was the third target in the most recent short-Yen analyst pick. Should this resistance hold for the near-term and should this USD-move soften a bit, this could open the door for ‘higher-low’ support in the effort of top-side continuation.
--- Written by James Stanley, Analyst for DailyFX.com
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