USDX Is Moving

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It might be Monday morning in Asia, but everyone’s focus is on Thursday’s FOMC meeting in Washington DC.

1 month ago, on August 19, it would seem that we were also looking at the USDX chart and concluded the following (as price sat at higher time frame support).

“Either way, anything long USD if the Fed flipped proper hawkish would be the type of trade that dreams are made of…”

Well zooming forward the 31 days to today’s chart and we can see that price gave us that bounce afterall.

USDX daily

USDX daily

From there, we’ve seen the majors start to slowly pull back and this theme is something that we’ll continue to explore on the @VantageFX Twitter account throughout the week into Thursday’s meeting.

Now, with the market obviously starting to price in the possibility of a September hike, I pose the next question of, could the market be setting up for a major disappointment to the downside?

Maybe major isn’t the correct adjective to use here, but for me the risk of the biggest move lays to the downside in USD if the Fed does as it is expected to do and stays on hold.

The markets definitely seem to be getting a little too far ahead of themselves for my liking and there could be opportunity in positioning yourself in this direction heading into Thursday’s FOMC meeting.

Have a fantastic week!

This Monday

JPY Bank Holiday: Japanese banks will be closed in observance of Respect-for-the-Aged Day.

As I hit publish on this blog, the S&P 500 has started to rip higher, with the inversely correlated Japanese Yen copping a hammering. Little strange to have such a flurry on the open with no obvious catalyst, but hey that’s markets!

This is a guest post originally appeared on Vantage FX. Reposted with permission.

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