Ahead of the Fed Interest Rate Statement

Today our main point of focus is the Fed interest rate statement, a decision that is far from being clear at this point. The market is getting ready for some action tonight, and breakouts are highly possible in almost all currency pairs.

EURUSD and GBPUSD might get ready to take off on a nice rally (EURUSD heading up to 1.4820 at the time of this writing), however I’m still expecting the moves to cool off starting with the US session open and prices getting back in range. Technicals are pointing towards a possible retracement on the higher timeframes, however any down leg needs to be confirmed by the fundamentals, otherwise we are looking at a continuation up.

In the (for me unlikely) situation that the interest rate favors the dollar short-term, the move down in EURUSD and GBPUSD just after the news could be a good opportunity to re-enter long on the larger bullish trend on these pairs.