Dollar weakness is the name of the game following the FOMC meeting, yet will this continue or are we set for a reversal in the near future?
EUR/USD breaks higher following FOMCFirst the Bank of Japan and then the FOMC;EUR/USD seems to have been a significant benefactor of central bank action over the past 24 hours. However, despite these gains, the recent rally has played into the wider creation of lower highs, as encompassed by the descending trendline of resistance.
With that in mind, we are looking for short opportunities upon seeing further short-term gains. The difficulty is in knowing which of the two swing highs to respect, be it $1.1284 or $1.1327. As such, the resistance zone between $1.1246 and $1.1279 should provide a reversal lower for a continuation of this recent descending triangle pattern. An hourly close above $1.1284 would negate this bearish view.
GBP/USD rallies towards key resistance levelGBP/USD has also benefitted from the dollar weakness story, with price rallying up towards the critical $1.3091 resistance level. Essentially, a break through this level would provide us with an increased likeliness of a more protracted move higher towards the $1.3200 area.
However, with price now heavily overbought and an ascending trendline up ahead, it looks like there is a good chance we will see this market turn lower rather than break through $1.3091. As such, a bearish view remains in play unless we post an hourly close above $1.3091.
AUD/USD continues to gain ground
AUD/USD has seen another strong move higher, with the pair now in the top half of its symmetrical triangle. With that in mind, it looks like the pair will likely continue apace until we get to the $0.7700 region where questions will be asked once more.
As such, look out for pullbacks as opportunities to get long in the short-term. Yet for a longer-term play, it is worthwhile seeing how the pair responds to that major multi-year resistance trendline.
