EUR/USD
As I write this article, we are awaiting the FOMC statement, but at the end of the day I do recognize that the market already expects the Federal Reserve to do nothing. They are anticipating that the interest-rate hike the perhaps towards the end of the year, so on that being the case it’s likely that we will continue to see very much the same. Ultimately, this is a market that’s fell during the course of the day found enough support near the 1.1150 level to turn things around and form a hammer. A break above the top of the hammer would be bullish but I think there is plenty of bearish pressure above to simply wait for exhaustion. The most recent rallies have been lower than the previous ones, so having said that the selling pressure is continuing to get involved. After all, the Federal Reserve is the only central bank contemplating raising rates.
GBP/USD
The GBP/USD pair and forth during the course of the session on Wednesday, as we continue to meander around the 1.0 level. We do break down from here should send this market looking for the 1.2850 level below, and as a result it’s likely that the sellers will eventually push this market down to the 1.25 handle. That is a much more significant level for support as far as I can see, so having said that I feel that not only a break down below the bottom of the range for the session on Wednesday is a signal to sell, but I believe that a rally from here will more than likely start to form exhaustion that we could sell from higher levels as well.
Ultimately, I believe that this market will continue to see quite a bit of negativity above, and I don’t think that this market can get above the 1.35 handle. This is an area that is essentially the “ceiling” in this market going forward.
