Markets have been a little quieter today as USD bulls and bears are waiting on the upcoming Wednesday FOMC announcement regarding the interest rate. It's all but priced in by now and almost seems certain, however markets are focused on the statement shortly after that around the US economy. The Tax plan will most certainly be the main point of contention for markets, with some looking for more upbeat expectations from the FED going forward because of the tax plan. The FED though could in turn act more dovish as it does not want markets to overheat and it's hard to tell as to what effect such a plan will have, either way it will be of course a big moment for the markets. For the most part I do feel that the USD is starting to tick away nicely and safe haven pairs like the JPY and CHF could be a little overvalued in the present market conditions, especially with their negative to nil interest rates - something the respective countries will be hoping for.
For me the USDJPY has been a bit of a dark horse as it ranges with a wide breadth presently. The most recent dip lower on the daily chart fell well short of previous drops and could be a strong that the bulls are starting to hold their ground. US PPI also out tomorrow could also set the tone for further jumps higher, but for me the technical's are showing bullish signs in what has seemed like a long overdue move for Yen traders. The real barrier here is the resistance band between 113.837 and 114.359 which has so far weathered a number of attempts by the bulls to push higher. If we can see a sustained extension above this level then it's likely we could see further bullish movements to resistance at 115.350 where unwinding could happen for a period. If the USDJPY can't break through this key area then it's likely we will see pressure on support levels at 113.112 and 112.282, with the potential for further lows to find support around the 200 day moving average.
Pound traders will also be eyeing up the volatile movements as of late that have been occurring. It seems that while a deal over Brexit has been reached, volatility still remains. Nowhere more so though than with the GBPNZD which has been roaring across the charts after today - managing to range over 300 pips.
Trading the GBPNZD does not come without its dangers though but for many a trader it's exciting. Like most GBP pairs it has been trending in a bullish manner, but today's pull-back was quite strong. Either way the trend line beckons and the bulls could be keen to make another move and swing this one higher yet again. If we see a further fall to 1.9079 then the trend line bulls could kick in. If we jump higher then resistance at 1.9471 will be the first target, with further extensions looking to extend higher to 1.9789.
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