Tuesday trade bought with it a mixed reaction to an 8% drop in oil, and surprisingly created a muted reaction in dollar trade. The key to momentum waning can be traced to the moves lower in European session trade on the German Dax; once equities dropped lower the dollar regained earlier lost ground, but was unable to add anything over and above that. The times to trade the forex market momentum are very well defined at the moment, with the most important time to be trading being the European open, and specifically the start of German Dax futures trade at 02:00 EST.
The majors are all at 4 hour chart support/resistance areas, and all are looking to challenge trade desks one way or the other ahead of the FOMC rate decision out of the U.S. on Wednesday afternoon. Cable and euro are still looking bullish, followed closely by the aussie. Swissy is undecided on direction and is the pair that many traders will be looking to for an overall sentiment read on Usd valuations. Cad is making some violent moves, but not really getting anywhere fast, and the Yen is stuck at support around the 88.50. If Usd/Jpy can generate momentum we can see huge upside potential for the Jpy based cross pairs.
The Fibonacci 4 hour support/resistance areas are clear to see;
Euro 23% support of the move from 1.4250 to 1.2750 is at 1.3100, with 38% resistance at 1.3350.
Cable 23% support of the move from 1.5400 to 1.2750 is at 1.3460, with 38% resistance at 1.4250.
Aussie 23% support of the move from 0.7295 to 10.6395 is at 0.6620, with 38% resistance at 0.6750.
Yen 23% support of the move from 94.60 to 87.00 is at 88.90, with 38% resistance at 90.20.
Swissy 23% resistance of the move from 1.0350 to 1.1670 is at 1.1400, with 38% support at 1.1250.
Cad 62% support of the move from 1.1735 to 1.2750 is at 1.2180, with 38% resistance at 1.2390.
These are the major price points that we will be covering over the coming sessions, and will be adhering to our schedule of times to trade the market looking for these momentum breaks.