Majors Advance Ahead of the Fed

Overall, the Asian session was flat, but the major pairs started heading up during the early European session. Following the greenback's decline throughout the European trading hours, the dollar index is preparing to break below the 76.00 area, which has been the main support level over the last six days of trading. The dollar's selloff comes on positive equity and commodity markets. Ahead, the market prepares for the Fed meeting, at 14:15 EST, which is likely to have a strong influence on the forex market.

Dollar Index Technical View: TheLFB Member Charts

4 Hour Chart: Mixed. Main price points: 74.95, and 76.82. Looking for: Wave ii

The dollar index is trading lower at the moment, away from the 76.82 top that was established at the start of the European session. This current move down could be a red wave c) of a black wave ii flat pattern. In this case, traders should be watching for a move down to the 76.70 support area before a bounce higher may appear again.

The alternative wave count, on a day of very important economics, is also one of the possible wave counts that is showing a clear zig-zag correction labeled as circled A, B and C. If this one is the correct count, then the 76.82 highs must hold, while the market trades toward the yearly lows.

The euro (Eur/Usd 1.4760) was one of the slowest-moving pairs of the day, advancing only 60 pips. This might happen as institutional trade desks are reluctant to move the euro ahead of the Fed and of the ECB meetings, which have an important role in the currency market. To the upside, the next target is the 20-day moving average, in the 1.4850 area.