<p>On the daily chart below, we can
see that the market is consolidating at the key 1731 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a>. The sentiment around the
banking sector remains skewed to the downside for now. Regional banks make up a
notable chunk of the Russell 2000 index and that’s why the index underperformed
for example the S&P500. </p><p>Tonight the Fed took another <a target=“_blank“ href=“https://www.forexlive.com/centralbank/fed-boe-boj-ecb-snb-boc-to-coordinate-action-to-enhance-liquidity-provision-20230319/“>emergency
action</a> enhancing the provision of US Dollars via swap lines with other major
central banks to increase liquidity. This weighed on the risk sentiment further
as the market is fearing that something serious is happening in the banking
system and as futures market opened, the market sold off non-stop during the
APAC session</p><p>On the 4
hour chart below, we can see that the sellers tried a break below the support
but it’s now getting faded. It’s likely that we’ll see first a pullback before
another push lower if the market remains on the defensive and the sellers want
to position short into the FOMC meeting. </p><p>It may be
that any action the Fed takes on the interest rates front would be bearish for
the market. On one hand, if they pause or cut it would signal that something
really bad is happening. On the other hand, if they keep hiking it may pressure
the market even more. </p><p>On the 1 hour chart, we can see
more closely the range created between the support at 1731 and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> at 1800. We may see now the
sellers leaning on the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a>, targeting the breakout and new lower lows. The buyers, on the other
hand, will need a break above the trendline to get some conviction and target
the top of the range at 1800. </p>
see that the market is consolidating at the key 1731 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a>. The sentiment around the
banking sector remains skewed to the downside for now. Regional banks make up a
notable chunk of the Russell 2000 index and that’s why the index underperformed
for example the S&P500. </p><p>Tonight the Fed took another <a target=“_blank“ href=“https://www.forexlive.com/centralbank/fed-boe-boj-ecb-snb-boc-to-coordinate-action-to-enhance-liquidity-provision-20230319/“>emergency
action</a> enhancing the provision of US Dollars via swap lines with other major
central banks to increase liquidity. This weighed on the risk sentiment further
as the market is fearing that something serious is happening in the banking
system and as futures market opened, the market sold off non-stop during the
APAC session</p><p>On the 4
hour chart below, we can see that the sellers tried a break below the support
but it’s now getting faded. It’s likely that we’ll see first a pullback before
another push lower if the market remains on the defensive and the sellers want
to position short into the FOMC meeting. </p><p>It may be
that any action the Fed takes on the interest rates front would be bearish for
the market. On one hand, if they pause or cut it would signal that something
really bad is happening. On the other hand, if they keep hiking it may pressure
the market even more. </p><p>On the 1 hour chart, we can see
more closely the range created between the support at 1731 and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> at 1800. We may see now the
sellers leaning on the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a>, targeting the breakout and new lower lows. The buyers, on the other
hand, will need a break above the trendline to get some conviction and target
the top of the range at 1800. </p>
This article was written by ForexLive at www.forexlive.com.