100 pip drop on the GBP/USD

The Dollar strengthens today after the FOMC Statement release, where the language used by the FED officials indicated that quantitative easing is over and that interest rates may go up sooner than expected. That is why we see the GBP/USD drop from the 1.6100 zone to the 1.6000 zone. On the one hour chart we can see that once the price broke down the 1.6100 level and the 200 EMA, the bearish momentum accelerated taking the pair close to the 1.6100 level. 

The EUR/USD above the 1.2700 level

The Euro versus the Dollar has continued with its bullish momentum for today and it is currently above the 1.2700 level. If tomorrow’s FOMC statement shows that the FED is in no rush to raise interest rates, then the Dollar may weaken and the EUR/USD could reach the 1.2800 level where we can see the second average target on the SmartPattern tool.

The EUR/JPY is struggling with the 137.00 level

The Euro versus the Yen is still consolidating around the 137.00 level, but it has not managed to give us confirmation of a breakout. A little bit above that round number level we can see the 200 period Exponential Moving Average on the 4 hour chart, which has also contributed in making this zone a strong resistance for the pair. However, we must be attentive to a possible breakout of the area, because the bullish momentum may accelerate if the breakout is confirmed. None the less, if the breakout is confirmed, the best thing to do is to wait for the pullback before attempting a long entry.

Bullish weekly continuation on the USD/CHF

It has been more than month since the USD/CHF broke the 200 period Exponential Moving Average on the weekly chart to the upside, around the 0.9403 level. Since the breakout, the pair has come back to the same moving average where it has found a good support during this week and it is about to close the week to the upside. We can clearly see that a breakout and pullback pattern has been completed around the 200 Week EMA and this could be an indication that during the following weeks the pair could continue going higher, especially if the FOMC statement for next week points out to a possible rate hike by the FED towards the middle or third quarter of next year.

The GBP/JPY at a key resistance on the Daily and 4 hour charts

The Pound versus the Yen has been strengthening for today and it has reached the so much anticipated resistance zone at the 173.52 level where the 55 period Exponential Moving Average on the Daily chart is, along with the 200 period Exponential Moving Average on the 4 hour chart. When the price reaches a moving average confluence area, especially between the Daily chart and the 4 hour chart, the zone becomes a very important resistance or support area. Therefore, we must be attentive to a possible bounce to the downside from this zone. If the price breaks above this resistance, then we could wait for confirmation of the breakout and then the pullback to the same area for a possible long entry.

The Shooting Star and the 200 EMA

The Shooting Star is a bearish reversal candlestick pattern which is formed by a candlestick with a small or non-existing real body and a long upper shadow. The longer the upper shadow; the higher the probabilities of seeing a change in direction to the downside. The 200 period Exponential Moving Average is very reliable as a support or resistance level, especially on the higher time frames like the Daily chart below of the EUR/USD. When a Shooting Star is formed around the 200 EMA, its implications as a bearish reversal pattern are even higher and there is a good probability that the price has found a strong resistance zone. Therefore, we should pay attention to the visits that price does to the 200 Day EMA and if a Shooting Star is formed around this moving average the chances of a bounce to the downside are really high.

The USD/JPY is at a key resistance on the 4 hour chart

The Dollar tried to rally versus the Yen for today, but it stays in a consolidation mode and it is undecided at the moment around the 107.00 level. A little bit above the 107.00 level we can see the 55 and 200 Exponential Moving Averages on the 4 hour chart, which have contributed to turn this zone into a good resistance area for the pair. It is probable to see a bounce to the downside from this zone and if this happens we could see a cross of the 55 EMA below the 200 EMA with longer term bearish implications for the pair. However, in order to see this scenario develop, the fundamentals would have to support the Yen and risk aversion should rise in the markets.