In yesterday’s daily market update, we focused on the price of Oil sitting at higher time frame resistance. One bread and butter setup we like to look for here, is if higher time frame resistance holds, then zoom into an intraday chart and short the re-tests.
Taking a look at today’s updated hourly chart, you can see that with a touch of the higher time frame trend line on the daily, price bounced and is now re-testing a nice little sell zone.
Let’s see if price can break and give the shorts a bit of early breathing room.
Moving onto the next chart we have been following here, and EUR/USD did get an initial bounce off support, but just ran out of steam as USD strength has taken a grip on forex markets this week as Fed speakers continued to do the rounds spruiking a December hike.
Goodbye trend line support!
Futures markets have priced in about a two thirds chance of a December rate hike, with November coming off down to under a quarter.
Fed's Evans: Election not a hurdle for Nov hike but would prefer to wait for more data
— Livesquawk (@Livesquawk) October 11, 2016
These comments from Evans yesterday highlight why markets are pricing in the USD move that they are. With last month’s FOMC meeting minutes to be released tonight, I’m expecting something similar to the above to continue to be drilled into markets.
If this in fact is the case, USD should continue to see buyers:
The USD/JPY chart has consolidated over the last week after a good rally off its bottoms.
The gap bounce we spoke about on the @VantageFX Twitter account was nice, and we’ll see if we can get any sort of a further trade out of this one from here.
On the Calendar Wednesday:
USD FOMC Meeting Minutes (Thursday morning)
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Dane Williams – @VantageFX
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