Good morning traders.
Back at my desk again this morning and I see we had a pretty lackluster day yesterday so I didn’t miss much.
None of the levels we held over from Monday were triggered during the London session so nothing to add to our performance data.
As for today there is not much to say other than it is all pointing to the FOMC rate decision and press conference at 19.00 and 19.30pm GMT respectively.
Apart from the continuing Brexit saga that is, which until we have a firm mutual understanding of the way forward continues to add a wild card to the euro.
On this score we had a couple of amendments passed in the House of Commons last night.
One (the Spelman amendment), was an expression of the unwillingness of Parliament to leave the EU without a deal. This is, however, not a legally binding amendment that PM May has to abide by but it does add weight to the UK not leaving without a deal which should be positive for cable and the euro.
The other was the Brady amendment which backed PM May to go back to the EU and effectively say “if you get rid of the Irish border backstop or change it to something we can live with” we have a deal. Or at least that is the best spin on it.
It all now seems to rest on Tusk and Juncker´s shoulders whose initial response was ´non, nada, nein´! It seems to me that the most positive outcome from this latest round of UK Govt. inter and intra party wrangling was that the Government appears to be united within its own party which may or may not be positive in eventually getting a deal.
Brexit aside I have nothing to add to the macro perspective we have been talking about for the past couple of weeks. Depending on what Powell says or doesn’t say our pair will either get a boost, get sunk or…. you guessed it, stick around in the range for a bit longer.
Given the price action over the past few days I don´t have any clear view whether the up or the downside has better odds from a swing pov. It is all on what Powell has to say. We will at least have more information in our armory after the event to try and figure out the likely direction of travel.
For today the charts are below but I would be careful about being in any trade in the immediate run up to and during the event. Things could get a little whippy!
The Daily Chart
The daily chart has continued to print green candles which is positive to the upside but we have been here before in this range so I am not reading too much into this prior to the FOMC tonight. A break and a close above 1.1465 ish would be the next signal for upside momentum.
The Hourly Chart
Levels as per.
Similarly (and somewhat obviously) the hourly chart has pushed upwards with 1.14 being held to the downside. For today the levels I have noted should hold the range up to the FOMC press conference. After that we could get a sustained run either way so be careful with what you take as S & R as they could easily change their purpose.
Have a good day, try and make your money during the London trading session and don´t make any rash decisions on the data unless you´re experienced at trading the news.
Talk again tomorrow and lets hope we get some traction one way or the other.