Weekly Technical Outlook: USD Trade Setups Heading into FOMC Forecast
- Review of current / active setups heading into this week’s Fed rate decision
- Review the Foundations of Technical Analysis mini-series
- Join Michael for Live Weekly Trading Webinars on Mondays at 12:30GMT
Its FOMC week and all eyes will be on the central bank interest rate decision on Wednesday with markets largely having priced in a 25basis point hike. The accompanying updated quarterly projections will likely to set the tone for the greenback heading into the close of the year- any revisions to the expected pace of subsequent rate hikes is likely to fuel volatility in the USD majors.
The Dollar Index (DXY) turned just head of resistance at 94.14/27 post-NFPs last week and heading into the start of the week, the immediate advance remains at risk while below this threshold. Look for a break below 93.40 to suggest that a more significant near-term high may be in place.
Take each USD cross on its own merits this week, with Aussie & Sterling favored in the event of dollar weakness and the Euro and Yen favored in the event of dollar strength. The USDCAD recovery is also at an interesting juncture with the recent advance now testing key near-term technical resistance- look for a reaction at these highs.
Keep in mind that in addition to the FOMC, we have the ECB & BoE rate decisions also on tap this week. From an event risk standpoint, things look promising!
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In this webinar we reviewed current & pending setups and updated technical levels on DXY, GBPUSD, AUDUSD, AUDJPY, EURUSD, USDCAD, USDJPY, NZDJPY, NZDUSD, GBPNZD, EURNZD, Bitcoin (BTCUSD),Ethereum (ETHUSD) and Gold.
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Key Data Releases
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Other Setups in Play:
- Ethereum Price Analysis- Traders Look to Bitcoin Rally for Inspiration
- GBP/USD Responds to Confluent Support – Outlook Constructive Above 1.3226
- AUD/JPY Recovery Stalls at Resistance- Monthly Opening Range in Focus
- NZD/JPY Challenges Resistance into December Open- Watch this Level
See our 4Q Projections in our Free DailyFX Trading Forecasts.
---Written by Michael Boutros, Currency Strategist with DailyFX