The growing anxieties which continue to shadow the currency markets ahead of the heavily anticipated Federal Reserve Market Committee (FOMC) policy decision this evening have left most investors cautious towards the Dollar. For an extended period, the Dollar Index has meandered between losses and gains with some support at 96.00 and resistance at 98.50. Although prices are searching for direction, a dovish policy meeting may encourage bearish investors to send the Dollar back below 96.00 and potentially lower. From a technical standpoint, the candlesticks are trading below both the 20 and 50 SMA while the MACD crossed to the downside. A breakdown and daily close below 96.00 may open a path towards 95.00.
The catalytic combination of EUR weakness and JPY appreciation from risk aversion has provided an opportunity for the EURJPY to decline back down towards the daily 20 SMA at 125.00. This pair is turning bearish on the daily timeframe and the negative impact of the ECB meeting last week Thursday which caused an upsurge seems to be wearing out as investors accept the benefits of the new stimulus package. Bears remain in control as long as the new lower high around 127.00 defends and breakdown below 125.00 should open a path for a steeper decline to 123.00.
The NZDUSD is turning bearish on the daily timeframe and a solid breakdown below 0.6550 may encourage bearish investors to attack prices towards the next relevant support at 0.6400. From a technical standpoint, prices are trading below both the 20 and 50 SMA while the MACD is on route to crossing to the downside. Previous support at 0.6550 may transform into a dynamic resistance which should provide the foundation for prices to sink towards 0.6400 and potentially lower. A bullish move back above 0.6700 signals bearish weakness and invalidates this daily bearish outlook.
Sterling weakness has been the main driving force which has sent the EURGBP to fresh weekly highs above 0.7850 during trading on Wednesday. This pair is bullish on the daily timeframe and the heightened concerns over the impacts of a Brexit to the UK economy should offer an opportunity for bulls to push the EURGBP to 0.7900. From a technical standpoint, prices are trading above the daily 20 SMA while the MACD has crossed to the upside. Previous resistance at 0.7850 should act as a dynamic support which could invite an upsurge towards 0.7900 and potentially higher. A bearish move back below 0.7700 suggests bearish weakness and puts this bearish setup at risk.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.