Forex Signals U.S. Session Brief, September 20 – Everyone Is on Hold for the FED, Even Cryptocurrencies
Skerdian Meta • 3 min read
The big event for this month is taking place today when the FED meets this evening. The market is all ears as most pairs are treading water, even cryptocurrencies. Although, I see a tendency in the market to lean against the USD just in case the FED disappoints.
What's the plan today Yellen, are you going to stop printing money?
Is GBP Back on Its Feet?
The GBP has certainly found some confidence in the last few months after a year of decline. It has climbed from 1.21 in March to above 1.36, although a big part of this surge should be attributed to the recent USD weakness.
In the last couple of weeks the climb has picked up pace and that’s totally GBP’s fault. The increasing inflation has pushed GBP higher, and today we saw another sector of the economy post some decent numbers.
Retail sales and core retail sales jumped to 1% today which gave the GBP another boost worth 100 pips. GBP/USD jumped above 1.36 again but has given back most of the gains.
Is this going to be the top for this forex pair?
It looks like buyers are having trouble whenever GBP/USD pushes above 1.36, so there is a case of a possible top around there. The weekly and monthly charts are severely overbought, which reinforces the idea that a reverse might be coming, but it has to come from the USD side in my opinion. Perhaps today after the FED?
Cryptocurrencies Are Stuck in a Tight Range
Cryptocurrencies made a massive U-turn last week and at the beginning of this week, during a period of immense volatility. They are very volatile indeed, but in the last couple of days we have seen them get stuck in a tight range.
That said, the range is ascending as you can see from the Ripple chart above. The Bitcoin and Ethereum charts don’t look much different either.
Fundamentals are scarce for cryptos; there’s not much besides a few comments, so the market sentiment and technical analysis is what works best for trading them, and we have plenty of them in our trading strategies arsenal.
We opened a forex signal in this pair this morning based on the bearish chart setup which is visible above, and that signal is looking pretty good at the moment.
The Elephant in the Room
The FED meeting is the main forex event this week, which is taking place at 7 p.m. GMT this evening. They are supposed to keep interest rates unchanged this time, and the general consensus is that they will leave it for December.
But we might get a surprise hike which would send the USD higher, although I don’t see any jump in USD as sustainable because the market is getting used to rate hikes from the FED.
What would be sustainable for the USD to reverse higher and keep climbing for months is a tax programme from Trump administration which is supposed to come shortly and the tightening of FED’s balance sheet.
The FED is not in charge of the fiscal policy, so the only way to stop the USD fall and reverse everything would be if the FED announced that they would be withdrawing the monetary stimulus (QE) soon, so we’ll keep an eye on the FOMC statement later today.
Trades in Sight
- The trend of the last two days has been down
- The retrace higher today seems to be over
- Stochastic is overbought on the H1 chart
- The 50 SMA and the ascending trend line on the H1 chart is providing resistance
Ripple has been trading in a tight range in the last couple of days, but this range is a descending one which makes it a downtrend, albeit the trend is quite slow.
We waited until the price completed the retrace higher this morning, getting close to the 50 SMA and the upper line of the range. Stochastic was overbought as well, so we decided to take that trade, which closed in profit as I was writing this midday brief.
I expect to be a dull day today, similar to what we have seen so far this week because the market has sidelined for the FED meeting later today. Until then, we will look for small trading opportunities like the one in Ripple.