We had a volatile market yesterday. The pair attempted to push higher, topped at 1.4246 butÂ the Dollar was supported by The Fed decided to maintain the target range for the federal funds rate at 0 to 1/4 percent and to gradually slow the pace of Treasury securities purchases.
Although supported by FOMC statement, the Dollar rally was limited by technical trendline support, as you can see in h4 chart below. We also have a broadening formation as a result of high volatile market, where the price made new highs and new lows with no clear direction. My technical focuses are on the broadening formation and trendline resistance/support. Here are the scenarios:
1.Bullish: If the trendline resistance and upper border of the broadening formation violated to the upside, further bullish momentum back towards 1.4336 could be expected and will be a potential threat to the bearish reversal scenario. CCI just cross the 100 line up on h4 chart, provide potential upside pressure, support the bullish view.
2.Bearish: If the trendline support and the lower border of the broadening formation violated to the downside, the bearish reversal scenario is confirmed at least testing 1.4000 support area.
The bullish scenario seems to have the advantage since supported by CCI, but until one of those conditions fulfilled, I prefer to stay out.