FOMC - Correction time?

The market talk of QE has made it sound like a done deal and if the Fed disappoints tomorrow the US dollar could catch a big bid.  It looks like the market realises and the dollar buying looks to have started ahead of the announcement.

As I posted back in July the S&P was rejected at the 61.8fib level in April, retraced back to the 38.2fib and then bounced back  50fib level at 1121.44 which is where we are now.

People who study fibs say price oscillates in a channel at the 50fib area between 52.78% and 47.22%.  So for me .... a close above 1146.71 means we go (much) higher and a close below 1096.16 means we go much lower.  Simple right?  That is what I am watching for and until then we keep oscillating in the 50fib channel.


The dollar index support level in my previous post looks like it has caused a halt to the slide in the dollar for now.
The problem when a market is waiting for a big level to sell or buy is it gets front-run. The whole market is waiting for EURUSD to get to 1.35 to sell again but it looks tonight like it has fallen out of its rising channel and a bigger correction is underway.  The Euro is the only currency that has failed to get back above its 200day moving average vs the dollar which is interesting.
All the talk has been about more QE from the Fed in anticipation of tomorrows meeting and a lot has been priced in.  If there is no more QE we could see some disappointment and a dollar rally.

EURUSD daily chart
Looks to be breaking down from the rising channel. A retest of 1.30 is underway and a break below 1.2950 support area sets up 1.26 next.

GBPUSD daily chart.  the 61.8fib and 1.60 round number resistance is holding and a break below 1.5819 sets up 1.5560 and the trendline/channel bottom support..  A break below there and cable should correct to 1.53 next.


All the dollar crosses look to be rolling over, AUD and NZD particularly.  I don't see any good trades in the yen crosses, I am waiting for breakouts and with FOMC it is all about the dollar this week.