Market Awaits FOMC Statement On Wednesday

The price of EUR/USD is growing today on the background of profit taking. The positive impulse of the greenback during the previous week was caused by optimism concerning the tax cuts in the US. Investors are in no hurry to accumulate positions ahead of the FOMC statement on Wednesday. There is a high possibility of another rate hike in the US, that has already been partially priced-in, but the rhetoric of the Fed’s statement concerning plans on monetary policy tightening in 2018 may lead to significant price movements. Hawkish views among the FOMC members may result in significant US dollar strengthening against other major world currencies.

The British pound keeps consolidating after strong growth in volatility which is explained by news concerning negotiations of the Brexit terms. The course of trading today was somewhat impacted by the data on the house price index from Rightmove which fell 2.6%. Strong price moves are forecasted tomorrow after the release of the consumer price index. Continued growth in inflation may force the Bank of England to tighten monetary policy settings.

The AUD/USD restored some of its previously lost positions amid the US dollar correction and positive statistics from China, where new loans came in at 1120 million for November against the 800 billion forecasted. Trading of the aussie today may be influenced by the news on new home sales in Australia at 23:50 GMT. The construction sector is a key one for GDP growth in the country.

EUR/USD

The EUR/USD price has left the limits of the local descending channel and in case of continuing the current impulse, the immediate objectives will be at 1.1825 and 1.1925. After strong growth today, we may see profit taking and the price rollback to the SMA100 or even to the strong support at 1.1730. Volatility is likely to remain high during the next couple of sessions.

GBP/USD

The GBP/USD demonstrated a decline in the amplitude of the price fluctuations. Currently, the MACD signal line has switched direction to positive and that may signal a price increase soon within the correction. The fall potential is currently limited by the inclined support line. After the end of the current consolidation, we are likely to see a powerful price movement.

AUD/USD

The AUD/USD quotes were not able to break through the important support line at 0.7500 and currently are consolidating above 0.7520. In case of breaking through the closest resistance near 0.7535, we will see the completion of the reversal pattern “double bottom” and the closest targets in this case will be at 0.7565 and 0.7600.