Today, traders will be monitoring the FOMC monetary policy decision and press conference for clues on when the next rate hike might be. It is expected to be mid-2015, and if there are hints of a possibly earlier hike, the USD can strengthen further. For now, we are seeing USD consolidate in the EUR/USD, GBP/USD and USD/JPY pairs.
The EUR/USD is holding below 1.30. If price can push above 1.30 after the FOMC risk, the pair is likely in consolidation/bullish correction mode. But we should limit the bullish outlook to 1.31-1.3110, or at most 1.3220 for now. The GBP/USD is already in bullish correction, reflecting GBP-strength this week. If price can push above 1.64 and a falling trendline from the 1.7191 high on the year, then GBP/USD might be in consolidation/correction with upside toward the 1.67 handle. Finally, USD/JPY is consolidating but threatening a bullish continuation. If price can push above 107.40, we should be in bullish continuation with 108, and 108.96-109 in sight. A failed bullish attempt would hint at consolidation, but with the JPY so weak, we should probably limit the USD/JPY bearish outlook to 106.
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