Today at 2pm the FOMC will release the Federal Funds Rate (which is expected to stay the same) and then on Friday, May 4th, the Non-Farm Employment Change numbers will be released. Will either of these reports change the market direction of the currencies? Possibly because there are several currencies that are overextended.
The AUDUSD is in a congestion area on the weekly chart (line of white dots with red ATR above price) with the Stochastics turning up. The daily chart has been moving down and the stochastics is also beginning to turn. This indicates a possible retracement back up to the red ATR on the daily chart. However, a three bar bullish pivot (or two bar bullish) could likely form indicating the retracement is beginning.
The daily GBPUSD shows a dramatic drop after the currency made a double top formation. However, the Stochastics is oversold and indicating a possible retracement. Currently, the currency is showing a bullish bar but that can change at the US open. The weekly chart is showing a white dot that may offer support for the retracement, as well.
The USDCHF daily chart shows a strong uptrend with the weekly confirming the trend as it has broken through the line of white dots. The stochastics looks overbought on both the daily and weekly chart indicating a retracement is likely in the near future.
The USDJPY weekly chart is finally turning to the upside but will need to find an area of support to continue its upward movement. This is also confirmed with the stochastics being above 80. The daily has previously tested for support and moved higher, through the line of congestion dots. With the stochastics overbought and turning to down, a retracement is likely for the USDJPY, either prior to FOMC and Non-Farm Employment Change, or shortly thereafter.
Both the FOMC and Non-Farm Employment Change typically create extreme volatility in the markets. A great way to trades these volatile reports is by using the binary options and spreads to define your risk exposure. Open a free demo account today to get started.