Dow Jones and S&P continues to rally by negating the previous expert technical forecasts on the street. While yesterday the sentiment in the market was encouragingly Bullish, today we might see a different story after the FOMC. Here is what we are seeing:
Before the FOMC, the Volume Sentiment at CBOE has been Bearish since the opening. The PUT/CALL ratio was 1.56 at the opening and gave a overall very Bearish outlook for the market. Even though the Volume Ratio is diverging towards the Neutral level right before FOMC, it is still at a high level. This overall Sentiment is giving us transparency in order to assess the Volume Distribution Level and find the technical edge to enter the next trade. Once they coincide together, the position would be taken without any emotional bias.
As per GBPUSD, we have always noticed this pair following DJIA correlation for a while. DJIA is showing a repeated Fractal Bearish pattern that is close to the end in terms of period and price symmetry. So, given the scenario in DJIA, a short approach is emerging on Cable as well. It is at a confluence of a Harmonic 5-0 pattern under the Impulsive wave of the Elliot Wave, and signaling a short from the Phi level near 1.5830-1.59 area.
Let's wait until FOMC since we still have rooms left to trigger the shorts.