EURUSD: Today’s FOMC to Test Buyers’ Resolve
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By
Justin Bennett
- / September 26, 2018
Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
Click here to get access to the same charts I use.
EURUSD bulls broke a significant resistance area last Thursday. I’ve mentioned the 1.1700/20 region a few times in the last couple of weeks as it’s the location of several highs going back to mid-July. You can even see how 1.1720 served as a pivot in May and June.
It only makes sense then that the area would attract buyers this week. That’s what I wrote on Sunday, and that’s what we’ve seen happen so far this week.
However, the single currency faces a critical test today. The Fed rate decision at 2 pm EST followed by the press conference at 2:30 pm EST will no doubt test buyers’ resolve.
Events like FOMC have a way of making or breaking a directional bias. So, if you’re bullish the EURUSD, you may not be by the end of today. Alternatively, today’s events could strengthen your bullish outlook for the Euro.
The same applies to those with a bearish bias. Today’s close at 5 pm EST will either help support your outlook or challenge it. It may even negate it entirely.
That said, it isn’t necessary to try to determine what will happen. Nobody knows the answer to that, and guessing is just another word for gambling.
What’s important is to stay neutral and patient enough to accept any outcome. Let the market show its hand before you commit to a position or even a bias.
How do you do that?
Simple. Let today’s session close (remember, I use a New York 5 pm EST close chart) before you make a decision one way or the other.
The pair will either hold above the 1.1700/20 support area or it won’t. If it does, we could see the EURUSD trend higher toward 1.1830 and perhaps 1.1950. Those are two levels I mentioned last week and again on Sunday.
And if the EURUSD should close the day back below 1.1700, it would signal that buyers have lost control, at least for the time being. It would also re-expose the 1.1530 support handle.
As for what you do between now and today’s close at 5 pm EST, my best advice is to do nothing. Any technical decision you make now in front of an event like a Fed rate decision is a mere guess, not to mention incredibly risky given the impending volatility.
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Leave a Comment:
24 comments
What would be your advice for someone who has. A position opened since Monday
ReplyIf it were me, I’d get out. The position is probably at breakeven or worse, so holding through FOMC would be too risky for me.
That’s just what I’d do though. It’s your money, so it’s your decision. 🙂
ReplyIncluding OIL in your analysis would be great!
ReplyThanks for the insights….is it possible to add commodities to your daily price action analysis , Oil to be specific?
ReplyHi Richard, I may make some additions before the end of the year. I’m considering adding gold and the S&P 500 at a minimum.
What do you all think about that?
ReplyGold analysis will aslo help but oil has better movement
ReplyOil and Gold Mr Spot On
ReplyThanks
Gold would be good.
ReplyGold analysis, yeeeah!
ReplyAdding gold and S&P 500 would be waooo. Thumb up for. This is a real sacrifice you are doing. I appreciate you sir.
ReplyThose will be just great.
Reply👍 thanx for the analysis
ReplyYou’re welcome.
ReplyHi Mr Spot On.
I really enjoyed the analysis you gave regarding the pin bars that were formed on the neckline of the universe Head and Shoulders
Please can you give us your views regarding the pin bar that is formed near 1.1830.
I was actually hoping that you were going to give us your analysis after the FEDS meeting today.
Thanking you in advance Mr Spot On
ReplyI wouldn’t call it a pin bar. It’s rather meaningless at the moment though.
ReplyThanks Justin.. GOLD please
ReplyYou’re welcome. It’s on the list. 😉
Replythank you so much Justin
ReplyYou’re very welcome.
ReplyThank you very much Justin
ReplyI really enjoyed your analysis
It helped me a lot
Wish you health and success!
“Guessing is gambling”. Powerful advice.
ReplyTq sir
ReplyGreat analysis as usual. But I stayed put in this one because of what appeared to be a H&S formation on the weekly chart. Now I’m running on a 140pips profit. Trailing stop active.
ReplyI want to Learn how to read signal
Reply