FOMC in Focus! EUR/USD, GBP/USD, and USD/JPY Analysis| KOL Analysis•Olimpiu Tuns

The US dollar remains under pressure ahead of the FOMC, the currency has registered a significant drop versus its rivals as the USDX has extended its sell-off. USD is on a declining path, so only a hawkish FED could announce potential reversals on the major pairs.

The US Pending Home Sales could increase by 15.6% in June, versus 44.3% in May, the Prelim Wholesale Inventories and the Goods Trade Balance will be released as well, but the major event is represented by the FOMC Meeting.

The FED is expected to keep the monetary policy unchanged in todays meeting, you should still be careful because the FOMC Statement and the FOMC Press Conference will bring high volatility, will shake the markets, even if the Federal Funds Rate will remain steady at 0.25%. A hawkish speech will boost the USD, while some poor economic data and a dovish FED could force the dollar to drop deeper versus its rivals.

● USDX Found Temporary Support

The US Dollar Index has managed to rebound yesterday after a 7-days consecutive drop, but unfortunately, it stays below the 93.81 broken support level. It has found support on the inside sliding line (SL) of the descending pitchfork, but the bias will remain bearish as long as the index is traded below the 93.81 - 94.00 and below the 50% Fibonacci line.

A USDXs further drop will punish the greenback which could continue to drop versus the EUR, GBP, JPY, etc. A reversal pattern printed after the FOMC could announce another bullish movement in the short term, this scenario will help the dollar to come back higher.

● EUR/USD Strongly Bullish!

EUR/USD is trading in the green after yesterdays minor decline, the price has tested the 1.1700 broken psychological resistance and now it seems ready to approach the near-term upside obstacles.

The 250% Fibonacci line and the 1.18 are seen as next upside targets, a USDXs further drop will push EUR/USD far above these obstacles. A valid breakout above the confluence area formed at the intersection between the 250% line with the 1.18 will bring a long opportunity with a target at the second warning line (WL2).

EUR/USD is bullish as it will remain bullish as long as it is located above the warning line (WL1) and above the 1.1495 static support, so the pair could climb higher despite a minor drop in the short term.

● GBP/USD At Resistance!

GBP/USD is pressuring the median line (ML) of the major ascending pitchfork, a valid breakout above it will confirm a broader upside movement in the upcoming period. As you can see on the Daily chart, the pair has increased between the median line (ML) and the 50% Fibonacci line, an upside breakout from this up channel will suggest a sharp rally towards the 1.3513 former high.

The new higher high, jump above 1.2814, has signaled a potential breakout through the median line (ML). We may have a minor drop only if GBP/USD will make a false breakout with great separation above the ML, or if a bearish engulfing will develop right on the median line.

● USD/JPY Trading In The Red!

USD/JPY is traded at 104.97 level, right below the sliding line (SL) of the descending pitchfork, the stabilization below this dynamic support will validate a deeper drop. The aggressive breakdown through the 105.98 static support and below the median line (ML) has announced a larger drop.

The downside 50% Fibonacci line and the lower median line (LML) could be used as downside targets if USD/JPY will resume its sell-off. USD/JPY will be bearish as long as it is traded below the upside 50% Fibonacci line of the descending pitchfork and below the 106.60 - 105.98 area.

{About the Author}

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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