Mid-Week Technical Outlook: Calm Before Fed Storm?

• USD shaky ahead of Fed
• USDJPY pressured below 141
• SPX500_m preparing to breakout?
• NQ100_m still in uptrend
• Gold climbs beyond $1970

An air of tension settled over financial markets on Wednesday as investors braced for the pivotal Federal Reserve rate decision. 

Global equities struggled for direction amid the growing caution, with European shares and US futures mixed as investors turned to the sidelines. Although the Fed is widely expected to raise interest rates by 25 basis points today, the key question is whether this will be the hike that concludes its aggressive campaign against inflation. Whatever the outcome of today’s policy meeting, it has the potential to rock financial markets. 

Here are some technical setups to keep an eye on ahead of the Fed decision:

Dollar shaky and vulnerable 

The dollar has weakened against all G10 currencies this morning, with prices testing the 101.10 level. As discussed throughout the week, the pending Fed decision is likely to heavily influence the dollar’s short to medium-term outlook. A strong breakdown below 101.10 may open the doors towards 100.72 and 100.00. Should prices push back above 101.50, the next key level of interest can be found at 102.35. 

EURUSD rebound or breakdown?

After rebounding from the 1.1032 region yesterday, the euro has extended gains this morning with bulls eyeing 1.1090. A solid breakout above this point may re-open a path back towards 1.12750. Should prices slip back below 1.1032, bears may target 1.0950. 

GBPUSD to resume uptrend?

Wednesday’s strong bullish daily candle could be early signs of GBPUSD bulls returning to the scene. Indeed, prices remain in a bullish trend with the MACD trading to the upside. A move towards 1.3000 could be on the cards if 1.2810 proves to be reliable support. Alternatively, a break below this point may trigger a selloff toward the 50-day Simple Moving Average.

USDJPY pressured below 141.00

USDJPY bears seem to be slowly creeping back into the scene, especially after prices broke through the 141.00 level. Dollar weakness could drag the currency pair towards 138.80 and 138.00, respectively. If prices can push back above 141.00, bulls could challenge 141.90 once again. 

SPX500_m breakout alert?

Expect the SPX500_m to be rocked by earnings releases from the largest companies in the world. The index remains bullish on the daily charts with resistance found at 4580. A strong breakout and daily close above this point could trigger a move toward 4640. Sustained weakness below 4580 could see prices test 4500 and 4463. 

NQ100_m still in uptrend 

Our trade of the week remains in an uptrend on the daily charts. A strong move above 15700 could inspire a move towards 15947. Should prices slip back under 15300, the selloff may take the index towards 14965. 

Gold gearing to push higher?

After kicking off the week on a rocky note, gold bulls seem to have their footing with prices trading above the sticky $1960 level. Should this rebound build momentum, this could take the precious metal towards $1985 and $2000. On the other hand, a decline back below $1955 may see prices test $1940 and $1932.

Federal Reserve Rates inflation indices EURUSD USD GBPUSD USDJPY SPX500_m NQ100m Gold