Forex Video Briefing (9/22) – USD Index, USD/JPY, EUR/USD
The USD Index was consolidating ahead of last Wednesday’s FOMC risk. Afterwards, we got a rally from around 84.00 to 84.81. In the 4H chart this merely continues the prevailing trend remained intact. Also, when we look at the weekly chart, we can see that price is cracking the 2013 high, which was at 84.75. Now, the USD is still strong, and in the medium to long term, there is still upside to the 2010 high at 88.70. However, as the weekly RSI pushes above 80, we should probably anticipate some consolidation ahead around the 85.00 area.
The USD/JPY has been unstoppable, and continues to be bullish. In the 4H chart we can see a bit of consolidation after the FOMC-induced rally, but there is really no sign of any bearish correction, unless price falls below 108.50. Even then we might have to limit the bearish outlookuntil more significant clues of topping. We would have to go to the monthly chart to look for where the next resistance will be at, since the USD/JPY is at a 6-year high. We can see that the 2008 high and a resistance pivot is at 110.67. As RSI readings in the long-term monthly chart down to the short-term 4H chart push into overbought territory, we can expect maybe some further bullish push due to momentum, but we should also expect consolidation in the 110-110.70 area as traders see overbought conditions and a psychological level of 110.
The EUR/USD broke below a consolidation after the FOMC meeting. Then after a pullback, price respected the broken range and essentially confirmed that bears are in charge in this market. As EUR/USD grinds lower, we should be aware of a key support factors just below 1.28. In the weekly chart we can see that the 1.2745 level is the 2013-low, and 61.8% retracement is at 1.2787. So, while we can expect the current bearish momentum to push EUR/USD lower, we should start anticipating consolidation in the 1.2750-1.28 area.