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28 Oct 2014
Session Recap: Volatility ahead of FOMC; Key levels in EUR/USD and GBP/USD
FXStreet (San Francisco) - Usually, the day before a big event is a non-session with ranges and sideways movements in major investment instruments. However, Tuesday was a funny day with a good appetite for risk. Stocks rallied amid earnings while the Dollar was shaken by US economic data.
At the beginning of the American session, a weaker than expected report of US durable goods orders sent the US dollar down against major rivals; but half an hour later, an upbeat US consumer confidence gave some breath to the Greenback that was able to hold levels.
EUR/USD closed positive for third day as the pair jumped to 1.2765 before returning to 1.2730 where it closed. According to Valeria Bednarik from FXStreet, "a critical resistance stands now in the 1.2780/90 price zone where the pair stalled several times over this October, and will probably keep the upside limited until the news."
GBP/USD also posted its third day of gains as the pair consolidated levels above 1.6100 but it remains below key 1.6200. "the 1.6200 level also represents the 50% Fibonacci retracement of the Sept-Oct drop as well as the neckline to an inverted head-and-shoulder pattern," points out Matt Weller from Forex.com.
Weller affirms that "both the MACD and RSI have turned higher after bullish divergences in recent weeks, showing declining bearish momentum and hinting at a potential turn higher." Before concluding that "a daily close above critical resistance at 1.6200, a more substantial bounce toward 1.6276 (the 61.8% Fibonacci retracement), 1.6385 (the 78.6% Fibo) or 1.6530 (the measured move target of the inverted H&S pattern) may come into play next month."
In related markets, US stocks rallied amid corporate earnings with the DJIA closing above the 17,000 level. Gold was shaken in between 1,235 and 1,222 before closing positive at 1,228. WTI oil traded sideways while remaining above the $81.00.
Main headlines in the American session
US: Durable Good Orders (Sep) dropped 1.3%
Case Schiller Home Price data comes a touch weaker than estimates. Trends lower.
United States Richmond Fed Manufacturing Index: 20 (October) vs 14
US Oct consumer confidence 94.5 vs 87.0 expected
US Stocks rally amid earnings; waiting for the Fed
At the beginning of the American session, a weaker than expected report of US durable goods orders sent the US dollar down against major rivals; but half an hour later, an upbeat US consumer confidence gave some breath to the Greenback that was able to hold levels.
EUR/USD closed positive for third day as the pair jumped to 1.2765 before returning to 1.2730 where it closed. According to Valeria Bednarik from FXStreet, "a critical resistance stands now in the 1.2780/90 price zone where the pair stalled several times over this October, and will probably keep the upside limited until the news."
GBP/USD also posted its third day of gains as the pair consolidated levels above 1.6100 but it remains below key 1.6200. "the 1.6200 level also represents the 50% Fibonacci retracement of the Sept-Oct drop as well as the neckline to an inverted head-and-shoulder pattern," points out Matt Weller from Forex.com.
Weller affirms that "both the MACD and RSI have turned higher after bullish divergences in recent weeks, showing declining bearish momentum and hinting at a potential turn higher." Before concluding that "a daily close above critical resistance at 1.6200, a more substantial bounce toward 1.6276 (the 61.8% Fibonacci retracement), 1.6385 (the 78.6% Fibo) or 1.6530 (the measured move target of the inverted H&S pattern) may come into play next month."
In related markets, US stocks rallied amid corporate earnings with the DJIA closing above the 17,000 level. Gold was shaken in between 1,235 and 1,222 before closing positive at 1,228. WTI oil traded sideways while remaining above the $81.00.
Main headlines in the American session
US: Durable Good Orders (Sep) dropped 1.3%
Case Schiller Home Price data comes a touch weaker than estimates. Trends lower.
United States Richmond Fed Manufacturing Index: 20 (October) vs 14
US Oct consumer confidence 94.5 vs 87.0 expected
US Stocks rally amid earnings; waiting for the Fed