The market reaction to the FOMC statement was muted with the U.S. dollar ending the trading day virtually unchanged against the euro and British pound. While the Fed minutes confirmed that the central bank is moving towards tightening, it also shows continuing disagreement among policy makers.
Last month's decision to hold interest rates at their current level was a close call, with three FOMC members dissenting for a rate rise, the minutes showed. Market participants expect the Fed to move in December and while the market is pricing in the probability of year-end hike, the Fed may consider that move to be inevitable to preserve the central bank's credibility.
Overall, the dollar remains bid on corrections and investors will be looking for dollar dips to buy the currency and participate on the dollar rally. Consequently, we expect further dollar gains in the medium-term but we will pay attention to potential pullbacks in the short-term.
There are no major economic reports scheduled for release today so trading could be quiet.
Here is where we see current resistance and support levels for both currency pairs:
EUR/USD
Resistance: 1.1050/60, 1.11
Support: 1.10, 1.0970
GBP/USD
Resistance: 1.2230, 1.2320
Support: 1.2150, 1.21
Here are our daily signal alerts:
EUR/USD
Long at 1.1040 SL 25 TP 20-30
Short at 1.0979 SL 25 TP 20, 60
GBP/USD
Long at 1.2220 SL 25 TP 20, 40
Short at 1.2140 SL 25 TP 30-40
Swing Signal performance 2016:
October: +295 pips
September: +357 pips
Daily Signal performance in pips:
October 2016:
EUR/USD: +132 pips
GBP/USD: +219 pips
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.