Today I’m going to share a EURUSD liquidity pocket that could become a factor following today’s FOMC.
We’ll discuss key levels for the euro, my longer-term target, and what to watch from the US Dollar Index (DXY).
Watch the video below and scroll down for the annotated charts and analysis.
EURUSD is starting November on a bearish note as we head into today’s Fed rate decision.
The euro caught a slight bid earlier in the day after testing the 1.0520 key area, but is once again struggling as we approach FOMC.
As always, trading ahead of high-impact events like FOMC is ill-advised.
Even if you get the overall direction right, the volatility and slippage during such events often result in getting stopped out prematurely.
With that in mind, I’m always skeptical of large moves ahead of FOMC.
Speculators ahead of high-impact news seldom get it right the first time.
Furthermore, a look at the EURUSD daily time frame shows a potential pocket of liquidity just above 1.0600.
It’s the same area we were focused on in October, and one that served as resistance on Tuesday, at least on a daily closing basis.
Large candles and wicks like the one produced during Tuesday’s selloff often illustrate pockets of liquidity that serve as magnets for price.
That doesn’t mean EURUSD will revisit 1.0630, as there are no guarantees in this business.
But it is something to keep in mind as we approach today’s events.
Keep in mind that we also have non-farm payroll on Friday, which is another high-impact event for the EURUSD.