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Price rallies and looks unstoppable on the Daily chart because has ignored some important resistance levels, could hit fresh new highs till the end of the days as the bulls are in full control. We have an amazing upside momentum as the Switzerland currency is trading in the red versus al its rivals, has dropped sharply also versus the greenback even if the USD is under pressure ahead the FOMC.

The CHF dropped aggressively even if the Swiss data have come in better compared to the previous reading period, the UBS Consumption Indicator jumped from 1.32 to 1.38 level, while the Credit Suisse Economic Expectations surged from 20.7 to 34.7 points, reaching the highest level since January 2014. The Euro rallied despite the lack of Euro-zone data, the pair was driven higher only by the technical factors.

EUR/CHF resumed the yesterday's impressive rally and has managed to jump above the median line (ml) of the minor ascending pitchfork and above the 1.1127 static resistance, the next upside target will be at the upper median line (uml) of the ascending pitchfork and higher 1.1198 long term static resistance.

Could also be attracted by the warning line (WL1) of the major ascending pitchfork, where he could find resistance again.

I've said in the previous analysis that the rate maintains a bullish perspective as long as is trading within the minor ascending pitchfork's body. Is strongly bullish again after the minor consolidation right below the upper median line (UML) and below the median line (ml).

Is very important to see what will happen when the rate will hit the 1.1198 major upside obstacle because a valid breakout above this level will confirm a larger increase in the upcoming months. As you already know, the pair moves in range on the long term, will escape from this extended sideways movement if will stabilize above the 1.1198 level.

On Wednesday morning it could be observed that the speculated reaching of the 2015 high level had became reality for the EUR/USD currency pair. However, after reaching the mentioned high level at the 1.1713 mark, the currency exchange rate began a decline. The depreciation of the common European currency against the US Dollar has driven the pair to trade below the support of the monthly R2 at 1.1657 and the moving supports of the 55 and 100-hour SMAs, which are located, respectively, at 1.1652 and 1.1634. Due to the reason that these level of significance have been passed the rate has no notable support until the 1.1594 mark, where the weekly pivot point is located at, and a decline to this level is highly possible during Wednesday's trading session.

The Pound was relatively steady on Tuesday morning, being supported by the weekly PP and the 55– and 200-hour SMAs circa 1.3015. However, this stable equilibrium changed mid-session when the rate shot up near the 1.3080 mark. This upward motion was not sustainable, as the price was pressured back to the aforementioned levels. By and large, the Sterling continues to move in an up-trend. Daily technical indicators suggest that it should trade higher in respect to Wednesday morning, trying to reach the weekly R1 at 1.3104. However, some minor depreciation may still occur. In case the rate breaches the trend-line, a fall down to the bottom wedge boundary is expected. Nevertheless, two sets of important fundamentals are to be released today.

On Tuesday, solid upside risks pushed the Greenback through three resistance levels, namely, the 55– and 100-hour SMAs and the weekly PP. As a result, a two-week descending channel was breached to the upside. The given momentum north was halted by the 200-hour SMA at the 112.00 mark. Despite several attempts, the rate failed to move past this level. However, trend indicators are still signalling a strong up-trend; thus, the 200-hour SMA may eventually be breached, setting the weekly R1 at 112.34 as the ultimate upside barrier for this session. Meanwhile, an immediate support is provided by the weekly PP at 111.68. This level is likely to be breached if bears prevail; thus, an intersection of the 100-hour SMA and the monthly PP is a more probable downside limit.

The strength of the monthly pivot point has proven itself to be strong enough to force the yellow metal's price into breaking the ascending channel pattern, which guided the bullion since July 11. The commodity price has not only passed the support of the ascending channel, but also various other support levels. Among them are the 55 and 100-hour simple moving averages and the weekly PP. On Wednesday morning the yellow metal had passed one of the last support levels before setting out to plummet down below the 1,240 mark. However, the fall of the bullion might be stopped by the 200-hour SMA, which was located at the 1,241.25 level during the early hours of the day's trading session.

German business morale reached its record-high in July, which contributed to the appreciation of the EUR/USD exchange rate. Right after the better-than-expected data was published, the Euro zone's currency strengthened against the US Dollar by 11 base points to reach 1.1663. The Ifo German Business Climate Index surged to 116.0 points, while analysts' anticipated it to decrease to 114.9 from 115.2 points registered in the preceding month. Overall, sentiment among German businesses remained upbeat and is expected to improve further. Moreover, Germany is set to show strong growth in the Q2 with higher private consumption and construction activity.

The Australian Dollar weakened against its American counterpart after the official report released by the Australian Bureau of Statistics showed that the country's consumer inflation growth slowed in the second quarter. At the moment of the data release, the AUD/USD currency pair fell by 0.16% to hit the 0.7900 level. The Consumer Price Index weakened to 0.2% in the Q2, missing expectations for a 0.4% expansion, as lower prices of oil and reduced travel and accommodation costs undercut the pace of growth. The Reserve Bank of Australia expressed doubts that inflation would reach its 2% target in the foreseeable future, suggesting keeping interest rates at the same level this and next year.

The NZD/USD has been in a steady uptrend and we can see the price above W L3 and D L3. The POC zones that we see at this point are clearly shown on the chart as POC 1 and POC 2. The POC1 0.7390-0.7405 (D L3, W L3, 23.6,EMA89) and POC2 0.7370 – 80 (ATR low, 38.2, D L5) could reject the price and as long as the price is above W L4 0.7345 , the bulls will have the upper hand. Targets are 0.7470 and 0.7505.

The Aussie dollar eased in early Wednesday's trading after inflation in Australia missed its forecasts in the second quarter (Q2 CPI 0.2% q/q vs 0.4% f/c, annualized at 1.9% vs 2.2% f/c) but dips were contained just above last Friday's low at 0.7875.

Rising thick 4-hr cloud also underpins the action, as probes below cloud top (0.7902) were so far short-lived.

Immediate downside risk will be minimized while supports at 0.7900/0.7875 hold, while break lower would risk extension towards 0.7856 (rising daily Tenkan-sen) and pivotal support at 0.7830 (Fibo 38.2% of 0.7527/0.7988 upleg).

Firm break here is needed to sideline larger bulls and signal deeper correction.

Res: 0.7941, 0.7970, 0.7988, 0.8000
Sup: 0.7900, 0.7875, 0.7856, 0.7830

Wednesday July 26: Five things the markets are talking about

What to expect from the Fed statement today?

Note: There is no press conference and the Fed minutes in a couple of weeks will provide fuller details.

Today's statement is likely to provide the following signals on three issues:

1. Caution ahead

Recent rhetoric from many of the voting members would suggest that on the U.S economic outlook that they are more cautious and a tad less confident about the strength of the economic recovery, pointing to headwinds to both higher growth and inflation.

The 'big' dollars recent demise is expected to help out on both accounts, but not enough to offset the concerns about Trumponomics (pro-growth policies that include tax reform and infrastructure spend).

2. Rates – to maintain a tightening bias

Despite the cautious tone, the Fed is not prepared to abandon its tightening bias theme any time soon – expect them to reiterate at least one more hike in 2017 (consensus expects December). But, this is expected to be quantified – more sensitive and more data dependent.

3. Balance Sheets: Prepping the market.

The Fed will continue to prepare markets for the beginning this year of a gradual shrinkage in their balance sheets through a reduction in its holdings of U.S Treasury and mortgage securities.

Expect them to downplay the potential impact on the market by signalling that the reduction will be very slow.

1. Stocks mixed results

Global equity markets are mixed after yesterday's lackluster session with the focus on today's Fed statement.

In Japan, strong earnings supported the Nikkei (+0.5%), rising for the first time in four sessions, but gains were capped by profit taking ahead of Fed decision.

In Hong Kong, shares rallied despite profit taking, helped by energy stocks. The benchmark Hang Seng index finished +0.3% higher, while the Hang Seng China Enterprises Index was up +0.5%.

In China, blue-chip stocks fell for a second consecutive day overnight on investor fears of further regulatory tightening. The blue-chip CSI300 index fell -0.4%, while the Shanghai Composite Index was little changed, up +0.1%.

In Europe, indices trade higher following generally positive earnings out of Europe. The Swiss SMI, FTSE and CAC are outperforming.

U.S stocks are expected to open little changed (+0.1%).

Indices: Stoxx600 +0.5% at 382.8, FTSE 0.6% at 7476, DAX +0.4% at 12306, CAC-40 +0.6% at 5190, IBEX-35 0.3% at 10550, FTSE MIB 0.2% at 21509, SMI +0.7% at 9002, S&P 500 Futures 0.1%

2. Oil prices are firmer on optimism of declining stocks

Oil prices again firmed overnight, holding atop of their two month highs hit on Tuesday, on expectations of a drawdown in U.S stocks and as a rise in shale oil production shows signs of slowing.

Brent crude has rallied +41c, or +0.8%, to +$50.61 a barrel, after rallying more than +3% in yesterday's session. U.S West Texas Intermediate futures have climbed +49c, or +1%, to +$48.38 a barrel.

Data from the API yesterday showed that U.S crude stocks fell sharply last week as refineries boosted output, while gas inventories increased and distillate stocks decreased.

Crude inventories declined by -10.2m barrels in the week ending July 21 to +487m, compared with expectations for a decrease of -2.6m barrels.

Prior to yesterday's inventory report, crude prices had been supported by Monday's OPEC announcement by the Saudi's that they would limit its crude exports to +6.6m bpd next month, almost -1m bpd below the levels of a year ago, while Nigeria voluntarily agreed to cap or cut its output from +1.8m bpd, once it stabilizes at that level – up to now, Nigeria had been exempt from the output cuts.

However, current price levels may be soon capped, as it's a level that could attract increased U.S shale oil production.

Next up is this morning's EIA inventory report at 10:30 am EDT. Consensus is looking for a drawdown of -3.3m barrels.

Gold prices are steady (fell -0.1% to +$1,246.94 per ounce) as investors await U.S Fed policy statement. The market is looking for any comment regarding inflation for directional guidance.

3. Yields await Fed

U.S government bonds pulled back for their second consecutive session yesterday, signalling an end to its recent rally amid continued focus on a possible shift by G7 members towards a tighter monetary policy.

Putting further pressure on prices is a large volume of new Treasury notes being sold this week, and the Fed's pending policy statement (2:00 pm EDT). U.S policy makers are not expected to hike rates, but the market is looking for any change in tone from policy makers, especially since they have leaned towards being a little 'dovish' in recent weeks. U.S 10-year yield is trading atop of +2.31%.

Note: The U.S Treasury will sell +$34B 5-year notes today and +$28B 7-year notes Thursday.

Elsewhere, Germany's 10-year Bund yield has fallen -2bps to +0.55%, while U.K Gilts yield has declined -3 bps to +1.232%.

Down-under, Australia's Q2 CPI data overnight showed that core inflation remains well below the +2-3% targeted by the RBA, which suggests that rates should be kept on hold for some time. Aussie futures suggest that there is +54.5% chance that the RBA will keep rates on hold until May 2018.

4. Dollar tame ahead of Fed statement

Sterling (£1.3016) has dipped after data this morning showed the U.K. economy expanded at a meager pace (see below). EUR/GBP trades at €0.8928.

Australia's muted inflation is being attributed to weaker wages and lower fuel costs. The AUD has fallen -0.5%, trading atop of its overnight lows of €0.7892. RBA Governor Lowe warned that there could be financial stability risks from “additional easing.” He also reiterated preference for a weaker currency.

The EUR has inched lower in early U.S trade, down -0.14% to €1.1630. On the release front, there are no events out of the eurozone. Markets are waiting for the Fed's rate announcement.

5. U.K economy posts lackluster growth

Data this morning showed that U.K economic growth remained subdued in Q2, expanding at a +0.3% q/q pace, as weak performances from the manufacturing and construction industries offset an improvement in services.

It's a slight improvement on the +0.2% growth rate of Q1, but still less than half the pace of growth at the end of 2016.

Note: The headline print was in line with consensus and the data covers the first three-months of the two-year Brexit negotiation period.

On an annualized basis, growth accelerated to +1.2%, from +0.9% in Q1.

Digging deeper, the expansion was driven largely by an improvement in services, which grew +0.5%.