On the daily chart below, we can
see that the sellers couldn’t keep the momentum going breaking out of the
0.6191 support. As the fears caused by the
failure of the Silicon Valley Bank and a possible banking crisis reached their
peak, the buyers stepped in as emergency actions taken by the Fed and the
incredibly fast repricing in interest rates expectations weighed on the US
Dollar.
The strong buying momentum has
made the moving
averages to cross upwards, which may be a bad omen for the sellers. All eyes now
are on the FOMC
decision today where the Fed is expected to hike by 25 bps.
On the 4 hour chart below, we can
see that there may be a possible inverted head
and shoulders pattern. The neckline would be the resistance at 0.6270 and the buyers will
need to break above it to gain conviction and extend the rally towards the next
resistance at 0.6389.
Right now, the price action is a
bit choppy as we’ve been basically ranging since the end of February. The
market needs a clear fundamental catalyst to find the direction at this point.
On the 1 hour chart below, we can
see that there’s not much to lean onto. The moving averages have crossed
recently to the upside signalling more buying momentum. There’s a minor
resistance level at 0.6230 which the buyers will need to break to target the
neckline at 0.6270.
The sellers may want to wait
until the price reaches the neckline or until the moving averages switch back
to the downside. In the end, it will all hang on the FOMC today and a hawkish
outcome would give a better catalyst for the sellers, while the buyers may want
a dovish decision.