The EUR/USD pair fell during the session on Wednesday, testing the 1.12 level. We formed a shooting star on Tuesday, so the pullback couldn’t have been a massive surprise, but at the end of the day there’s also a hammer from the Monday session. Because of this, the truth of the matter is the market should continue to find volatility. Today will of course be very interesting due to the fact that we have the European Central Bank interest rate announcement coming out, which of course can cause quite a bit of volatility.
On top of that, the jobs number comes out America on Friday. This can cause a bit of push back against any move that we make today, so I would anticipate that the market is best traded on the short-term charts in general. The market will continue to be difficult.
Sidelines?
I think that staying on the sidelines will probably be the best way to deal with this market in the near-term. The 1.1150 area should offer support, so I would consider buying on a supportive candle on a short-term chart. The move will probably struggle to get above the 1.13 level, and as a result we will probably best be traded with half-sized positions. I think that the next 24 hours will be pivotal, and as a result I think that we will have longer-term trades available after the decisions are announced and made. Because of this, the market will be one that takes a lot of money from trader’s accounts going into the next two sessions, but ultimately we should see a strong and clear signal as to where the big money is going this fall. Liquidity has been an issue, and this is about to change. By the time Monday rolls around, we should have an idea where to place our trades. Until then, I am very hesitant to get involved.
