Going back to December and January 2016/17, the swing highs at that time reached 118.65 and 118.60 respectively (see weekly chart above). The price highs yesterday and today are approaching those levels. A break above would increase the bullish bias and send the price into the higher extreme area from late 2014, most of 2015 and into early 2016 that saw the price peak at 125.851 (see red shaded area in the chart above).
For today, the low to high trading range is confined to only 26 pips. The average over the last 22 trading days has been 66 pips (about a month of trading). There is room to roam and it seems the market is awaiting the next shove (from the FOMC decision?). However, the buyers are certainly remaining more in control given the narrow retracement.
Yesterday the trend move to the upside showed some cracks after breaking back below its 100 and 200 bar moving averages on the five minute chart (see blue and green lines in the chart below).
However, the price decline was modest (between the 38.2 – 50% of the move up from the last ledge near 116.788) did rebound into the close, and the price action today has seen a non-trending bias with the pair trading above and below its 100 and 200 bar moving averages.
Also of note yesterday from a technical perspective is that the price decline stalled right near the underside of the broken trendline that occurred on Monday. The inability to move back below that trendline is another bullish signal that keeps the technical tilt to the upside (until broken). That trend line is at 117.78 today (and moving higher each day).
Summary: There are various clues from the 5-minute, daily and weekly charts today.
Clearly, the market is taking a breather ahead of the FOMC, but despite the correction yesterday, the buyers still hold more control (above the broken trend line on the daily chart at 117.78).
Having said that, getting above the high from yesterday and getting above the 118.60-118.65 area is still a key hurdle and would increase the bullish bias on a break – taking the pair into the high extreme for most of 2015. Moving below 117.78 (broken trend line) would start to weaken the technical view and should lead to more downside probing.