By Jake Fillipp

With everyone's eyes on this week's FOMC meeting, there is endless speculation as to how markets will react to the upcoming rate decision and the all-important policy statement. These are usually good times to step aside and look at things from a larger perspective in order to plan one's next move in what could be some explosive price action after the rate announcement. The Australian and New Zealand Dollars seem to setting up for some interesting opportunities regardless of the FOMC outcome. From a fundamental perspective, the Kiwi and Aussie have been favorites of those putting on carry trades to fund riskier investments. Unlike their central bank counterparts in Canada and the UK, Australia and New Zealand do not appear to be in a rush to cut their benchmark rates anytime soon. This will leave the Kiwi and the Aussie as the clear favorites for those putting on carry trades should risk-aversion not permeate the market along with equities and commodities like gold continuing to trade with a firm bid.

Gathering Steam for a Move Higher?

From a technical perspective, both the Aussie and Kiwi are knocking on the door of some key medium-term resistance levels. The AUD/USD pair appears to have found a base between .8660 -.8700. Daily oscillators are moving higher and two consecutive daily closes above .8850 could point to .9000 and .9100 by the end of the year, with a clean break of .9100 opening the door to a retest of multi-decade highs reached last month at .9400. The NZD/USD pair has been trading in a 400 pip consolidation range between .7400-.7800 since October. A similar daily close above .7800 in Kiwi could signal a breakout and give scope to a challenge of .8000 and a test of the highs last summer around .8120.

AUD/USD Daily500

NZD/USD Daily500

Charts courtesy of FX AccuChart

Jake Fillipp

Market Strategist

Brewer Futures Group, LLC.

200 South Michigan Ave, 21st Floor

Chicago, IL 60604

(312) 896-3989

DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency and investors may lose all or more than their original investments, and the impact of such events is already factored into market prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from Brewer Investment Group, LLC or its subsidiaries and affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed.