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Pre-FOMC Price Action Setups: GBP/USD, USD/CAD, USD/CHF, AUD/USD

Pre-FOMC Price Action Setups: GBP/USD, USD/CAD, USD/CHF, AUD/USD

2019-09-17 19:00:00
James Stanley, Currency Strategist
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Price Action Talking Points:

  • All eyes on the Fed: Tomorrow brings the September rate decision at the FOMC.
  • Will the bank highlight more softening in Q4 and 2020? Or will tomorrow’s cut be framed as another ‘mid cycle adjustment?’
  • DailyFX Forecasts are published on a variety of markets such as Gold, the US Dollar or the Euro and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

Tomorrow brings the FOMC for a highly-expected rate cut. This move has been anticipated for quite some time, even before the Fed’s rate cut in July which was the first such move since the Financial Collapse. What hasn’t happened of recent is updated FOMC projections via the Summary of Economic Projections, and this will likely be the price action driver around tomorrow’s rate meeting. In this webinar, I looked at a series of setups around the US Dollar in anticipation of tomorrow’s rate decision.

The US Dollar

USD price action has been all over the place over the past couple of weeks with very little directional uniformity. Tomorrow’s FOMC rate decision could break that impasse, although guessing which direction plays out could remain as a challenge. In the below setups, I looked at a few different scenarios on either side of the equation.

US Dollar Four-Hour Price Chart

Pre-FOMC Price Action Setups: GBP/USD, USD/CAD, USD/CHF, AUD/USD

Chart prepared by James Stanley; US Dollar on Tradingview

EUR/USD: Beware the Trap

The ECB came to the table with something large last week and markets basically shrugged it off. The Euro is now trading higher than it was pre-ECB, bringing into play a big level of resistance yesterday. Support played in from the 1.1000 handle earlier this morning, setting up for a nasty scenario around EUR/USD in which trends remain a distant prospect at this point.

EUR/USD Four-Hour Price Chart

eurusd price chart

Chart prepared by James Stanley; EURUSD on Tradingview

USD/CAD for Bearish USD Scenarios

I’ve been following USD/CAD for bearish USD scenarios of recent and that scenario remains attractive ahead of the FOMC. This morning saw another resistance test around the 1.3300 handle, at which point sellers came back into play.

USD/CAD Four-Hour Price Chart

usdcad price chart

Chart prepared by James Stanley; USDCAD on Tradingview

GBP/USD: More Room for Rally?

Also on the short-side of the US Dollar, GBP/USD remains as attractive. The pair perched up to the 1.2500 level, extending the bullish rally from the support zone investigated yesterday. The primary complication at this point would be chasing a fresh breakout after a print of new highs but, the door can remain open for continued topside here.

GBP/USD Four-Hour Price Chart

gbpusd four hour price chart

Chart prepared by James Stanley; GBPUSD on Tradingview

USD/CHF for Long-USD Scenarios

On the other side of the US Dollar, USD/CHF could remain as attractive for long-USD themes. The pair remains in a bullish trend channel that’s been in-play over the past month, and this can keep the door open for more, especially if USD-strength shows after tomorrow’s FOMC rate decision.

USD/CHF Four-Hour Price Chart

usdchf price chart

Chart prepared by James Stanley; USDCHF on Tradingview

AUD/USD Reversal Scenarios

Also on the long side of the US Dollar, AUD/USD could be of interest. The pair ran into a resistance zone last week and started to push lower earlier this week. Prices are now re-testing this key zone, keeping the door open for short-side swing scenarios.

AUD/USD Four-Hour Price Chart

audusd price chart

Chart prepared by James Stanley; AUDUSD on Tradingview

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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