The trend is usually your friend, especially on the higher timeframes. Despite the recent rallies, the US Dollar Index is conforming to the long-term downtrend and is headed lower.
With the Dollar down -0.26% for the day, many majors are positioning for moves to the upside. GBPUSD is one pair that is almost ready to launch. This pair has met the high created last week as price action has completed a break, retest, and rejection sequence. If the daily can close bullish, price action traders will look to go long and target the high made in 2017.
A minor currency pair that is setting up for a long is NZDJPY. As NZDUSD continues to climb, its minor counterpart NZDJPY has found enough momentum to go higher as well. Price made several attempts in the past week to go lower, but price action is showing a clear reluctance to do so. A bullish daily closure can be enough confirmation to go long, with last week’s high as a target.
Tomorrow is the all-important FOMC rate decision and press conference. Rates will most likely stay the same, but the tone of Powell’s speech is unknown. The press conference will warrant more of a reaction in the market than the rate decision. Traders are encouraged to close any open positions before the event.