The FOMC Minutes, Brexit, And ECB Cancel Each Other Out

Major Forex Pairs – Technical Overview And Weekly Predictions

A marathon deliberation between EU leaders determined that Britain will remain a member of the European Union until October 31st.. The option to leave earlier is still on the table provided Theresa May can secure enough votes for a Brexit agreement.

The European Central Bank is set to hold interest rates steady at low values throughout the current year and the Fed announced a similar path through their Meeting Minutes released earlier this week. Volatility has remained relatively subdued and the major FX pairs had a slow week, with action picking up towards the end of the period.

EUR/USD – Technical Outlook

The Euro is pushing to the upside and currently struggling to break the key resistance at 1.1300, trading barely above it at 1.1310. The week has been bullish albeit just Monday and Friday showed significant movement.

The current resistance (1.1300) is very important for future price action but it must be noted that even if a break occurs, the bulls will still be facing strong resistance. Strong resistance is represented by the 100 days Exponential Moving Average and the long term bearish trend line seen on the chart. A failed break of 1.1300 would increase the chances of another test of 1.1216 support and possibly 1.1176.

The MACD is crossed bullish but doesn’t show strong momentum despite price printing a higher low after several lower highs and lower lows. All these are mixed signs which show that the pair doesn’t have a clear bias but a break of the resistances mentioned would tilt the balance in favour of the bulls.

GBP/USD – Technical Outlook

The Pound has remained surprisingly quiet during the latest round of Brexit drama. The pair has been trying the entire week to move away from a bullish trend line but not quite able to do it.

Although price has been in an uptrend since December 2018 the US Dollar has been gaining momentum and the bears are threatening a break of the trend line. If they manage to break said trend line and the support at 1.3000, the pair will likely slide into 1.2800 area but this will probably take more than a week, depending of course on Brexit news, if any.

USD/CHF – Technical Outlook

The green-back has been posting solid gains against the Swiss Franc. The pair is currently trading very close to 1.000 and in a continued climb since bouncing at 0.990.

Although it climbed consistently, the pair doesn’t show strong momentum so it’s very likely to see a drop into the 100 days Exponential Moving Average. If price finds support there and bounces higher, we will probably see another attempt to break 1.010 but this may take more than a week to happen. A drop through the moving average will make 0.990 the next target.

USD/JPY – Technical Outlook

Currently trading at 111.95, the pair is approaching a strong resistance zone represented by the previous top at 112.15. It is showing upside momentum which sets the stage for a bullish break.

Price bounced nicely at the 100 days EMA just 2 days ago and now threatens the resistance at 112.15. A break would mark the end of choppy price action seen over the past two months. It would also signal a resumption of the uptrend started in early January 2019, leading to a move into 113.00 area and possibly 113.50. A break of the 100 EMA would invalidate this scenario and would make 110.00 the next destination.