I’m seeing potential trades on EUR/USD and USD/JPY this week! What about you? Got any forex setups lined up for the FOMC event?
As you can see on the chart above, EUR/USD has been on a steady uptrend since the start of the month. In fact, just last March 8 the 100 SMA has even crossed above the 200 SMA, something that I take pretty seriously considering that crossovers had heralded good swing trade opportunities for the pair the last two times that it happened.
This time around I’m offered a chance to buy at a 100 SMA retest just above the rising trend line. The fact that the 1.1100 major psychological handle is nearby doesn’t hurt either. I’m worried about entering a trade ahead of a major event, though. I think I’ll wait for the FOMC’s releases before I commit to any position.
Any hints of future rate hikes from the Fed could break the uptrend, while more stalling or standing on the fence can hurt the dollar’s rep and boost this pair higher. What do you think? Are you watching this one, too?
Here’s one for swing traders! As Big Pipppin pointed out earlier, USD/JPY is trapped in a symmetrical triangle on the 4-hour time frame. The bulls have one less issue to worry about after the BOJ decided to keep its current policies steady this week.
A hawkish FOMC statement could very well push the pair back to its January highs. On the other hand, the Fed is widely expected to not only keep its policies steady, but also refrain from giving any hints regarding its interest rate hike schedule. Frustrated dollar bulls could decide to call it a day and unload their long dollar trades if Yellen and her gang stick to their cautious rhetoric or publish lower inflation and growth rates. In any case, this setup is definitely on my radar!
How about you? Which setups are on your radar or are you trading this week? How are you planning on trading the FOMC’s event? Feel free to share!