The EUR/USD pair fell during the session on Tuesday, as the 1.10 level has yet again offered resistance. With that being the case, looks like the market is going to continue to go much lower, although there is a bit of a support barrier in the region of the 1.0750 region. Nonetheless, I do think that eventually we break down below there and head towards the 1.05 handle. There are a lot of different reasons why this could happen, but quite frankly I think that one of the biggest reasons could be the FOMC Meeting Minutes coming out today.
It’s possible that we could get a bit of a surprise, and if we do, that could have quite a bit of an effect on this market. With that, it’s very likely that the market will be very volatile, so therefore it is going to be a bit difficult to hang onto any significant sized position. However, I do believe that ultimately even if we rally, that will more than likely be a selling opportunity.
It’s not just about the FOMC
Keep in mind that even though the Federal Reserve could shock the markets with some type of announcement, you have to remember that the European Central Bank will have to continue with very loose monetary policies going forward. So unless of course the Federal Reserve basically comes out and says that they are not going to raise rates this year, I suspect that anytime this market rallies there will be sellers still.
The 1.10 level above is massively resistive, and on top of that I believe that there is significant resistance all the way to the 1.15 handle. So because of this, it’s very difficult for me to imagine buying this pair, and any time it rallies I simply wait for a nice selling opportunity based upon a resistant looking candle. Ultimately, it’s only a matter of time before the sellers take control, so I am selling rallies or a break down below the aforementioned 1.0750 handle.
