Despite negative outcome of the German PPI on Tuesday, the Euro gained immensely against the U.S. dollar where it gave a smooth bullish rally from the 1.3380 pivot point to 1.3450 resistance area. The move was predominantly based on speculation and technical levels, where investors are anticipating the lowering of bond buying by the FED on FOMC meeting minutes due today in the U.S. session. Therefore, in order to go short on the pair, investors are finding a good selling price to maximize their profit; hence a good opportunity is there to sell the pair with tight stop loss set just above 1.3450.
However, to play safe, traders must wait for the decision in the FOMC minutes where a move above 1.3450 could also show 1.3472 1.3489 and 1.3503 if no tapering decision is taken.
Triple Top for GBP/USD
A triple top has been made by the British Pound near 1.5675 area where it failed to sustain above the resistance area of 1.5687 and is currently trading at 1.5660 in the early trading hours of the Asian session.
Much anticipation and chances are there for the pair to drop on Wednesday where a bad outcome of Public sector net borrowing and industrial order expectations could even fasten the entry of bears in the market. If everything goes in favor of the U.S. dollar today, the pair may go down by more than 100 points and test the 1.5556 critical support point, closing below which could be a disaster for the pair.
The existing home sales data for the U.S. is also due just after the start of the U.S. session, where a one sided outcome could cause good movement in the USD pairs.
Aussie Back on Track
Much hyped bullish run by the Australian dollar last week resulted in what it was destined for, bearish control.
Plunging by straight 200 points in just two days, AUD/USD is currently hovering at the 0.9069 level where it is playing in the bearish channel and would face strong resistance at 0.9115 and 0.9130 areas where sellers would try re-entering the market. On the other hand, if it manages to move down below 0.9050 then it would re-test its yesterday’s low of 0.9025, breaking of which could show 0.8985.
There is such strong fundamentals due for the Aussie that could give some hope of bulls taking control, but the important meeting by the FED members is definitely there to make the pair volatile yet again.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org