We are positive risk in the short term irrespective of the outcome of the FOMC tomorrow. We do expect the Fed to hold off on further QE in tomorrow’s release which should spur a risk sell off. This risk sell off is seen as a buying opportunity. We have closed out long NZD/JPY position ahead of the meeting but will be looking to add to risk pairs at lower levels after the release if prices show signs of stabilization. We are looking at the following pairs.

AUD/USD: This pair is coming up against stiff resistance in the 1.02-1.03 region. We expect this pair to retrace to the 1.0-1.0050 region of Fed does not announce QE. If the prices show signs of stabilization at these levels we will be looking to go ling with targets close to 1.0250. We will inform you of stops when the trade is triggered.

NZD/JPY: This pair should also see a negative reaction to no QE from the Fed and should find support in the 61.80-61.20 region. We will be looking to go long on signs of stabilization at these levels with targets of 63.20. We will inform you of stops when the trade is triggered.

If the Fed does announce QE then risk pairs should move higher from current levels without retracements. 

We will update you on any positions taken. Good Luck trading. 

Figure 1: AUD/USD

Figure 2: NZD/JPY