A clash of Sentiment pre FOMC

The USD is continuing to trade with sensitivity ahead of the long anticipated FOMC decision. Due to the uncertainty which has been caused by the Fed in regards to a rate hike, the USD has been exposed to pressure, which has caused erratic behaviour within commodities and emerging currencies for an extended period of time. Sensitivity within the USD has amplified any positive economic data releases from the States, which has instilled American equities with bullish momentum.

In the European session, retail sales for the United Kingdom printed at 0.2% which met expectations. Although the UK continues to produce robust economic data which should strengthen the GBP, the reaction today was muted due to the pending FOMC statement. USD sensitivity may amplify the reaction to the unemployment claims for the United States in the New York session. If the results show that fewer people are claiming unemployment in the States then some bullish momentum may be inspired within the USD.

For an extended period data from the United States has offered a compelling argument to why rates should be hiked in September, but global developments relating to China have led to diminished clarity, resulting in a clash of sentiment between market participants. Whilst most remain on the fence above what the Fed will do on Thursday, the irresolute mentality affects the USD which has already been exposed to weakness due to the weakening expectations of a rate hike.

Yellen has stated that it was not when the rates were hiked that mattered, but the pace of tightening, but with this being the case if the Fed does decide not to hike rates today then the USD may be exposed to further weakness. This weakness will instill bullish momentum back within commodities and emerging currencies.

GBPNZD
The GBPNZD is bullish on the daily timeframe. Prices are above the daily 20 SMA and the MACD trades to the upside. The candlesticks are currently in a wide upwards trend channel and resistance can be viewed at 2.4500. A breakout above the 2.4500 resistance may open a path to the 2.5000 level. A move back below 2.3950 invalidates this daily bullish outlook.

EURCAD
The EURCAD remains bullish on the daily timeframe as long as prices can keep above the 1.4650 support. The slight breach above the 1.5000 resistance did not warrant enough momentum for a solid breakout. Another daily close above the 1.5000 resistance may open a path to the next relevant resistance at 1.5400. The MACD still trades to the upside, but prices must move back above the daily 20 SMA for the bullish momentum to resume.

AUDCHF
The AUD appreciated as news was released that there was a strong rebound in the price of iron ore. The AUDCHF has become technically bullish on the daily timeframe. Prices have breached the 0.6900 previous resistance and the MACD is in the process of crossing to the upside. For this bullish momentum to hold, prices must keep above the 0.6900 support.

CADJPY
The decline in commodity prices has continued to put pressure on the CAD. The CADJPY remains technically bearish on the daily timeframe as long as prices can keep below the 92.50 resistance. The pair trades in a crucial territory as even though the MACD still trades to the downside, prices are above the daily 20 SMA.