The sell off in the Dollar-Index after the last FOMC meeting was short-lived. In this regard at least the FX market respects the FED’s start of the rate hike cycle and pushes the Dollar-Index towards the 100 mark. For now the 99.30/40 level works as resistance but above the big psychological number 100 should be reached swiftly. The downside of the recent range has been the 97.80/75 level and gives us the decisive medium-term support zone.
(source: fxstreet.com)
EURUSD -- 1.1045
The currency pair is still hovering around 1.1000 and trades below the descending mid Bollinger band. Anyway there is no dynamic to the downside and the pair looks like a quick push back to 1.1100/21 is possible at any time. It just lacks one real good Ukraine headline as the market is eager to buy. Above the 50 ema (1.1148) and 1.1200 the short scenario is over. (Ukraine news is coming in right now and the pair immediately jumps 50 pips higher.)
GBPUSD -- 1.3094
The downtrend is still valid and the 1.3000 support zone is in sight again. Anyway you could try a tactical long towards that level with a tight stop, because “When things get even worse for the british pound there is no more support before 1.2850 or even deeper at 1.2675” (Morning Call #61).
USDJPY -- 123.73
The rally will come to an end, that's for sure. But nobody knows from where the sell off will start. At least we have another level to the upside now with the spike high to 125.10 yesterday morning. The currency pair is massively overbought and the market is eager for no reason. At the latest towards 125.86/126 I would think about shorts.
AUDUSD -- 0.7504
The Aussie had a good run against the Dollar amid soaring risk sentiment. The resistance at 0.7550/56 has held so far and can be used as a stop level. But as I said, the mood to buy “risk” is very strong at the moment. If you like to trade the trend look better for longs.
Good luck,
Sebbo