The EUR/USD pair fell initially during the course of the session on Thursday, and as a result found buyers at lower levels yet again. By the end of the day though, we ended up having a very strong looking candle that was approaching the 1.13 handle. You have to keep in mind though that we have been consolidating for some time now, and as a result now that we approach the highs of the area, I would anticipate seeing bearish pressure.
With this, I feel that every time we pull back there will more than likely be buying opportunities in this market for short-term trades only. This is because there is a lot of volatility and the range is relatively small, a mere 200 pips. If you keep in mind that there are a lot of things going on at the moment, and this of course is being reflected in this particular currency pair.
Federal Reserve
The Federal Reserve is anticipated to do an interest-rate hike by most economists, but there have been questions recently as to whether or not they will be able to do so. On top of that, even if they can a lot of people believe that it will be “one and done” as far as interest-rate hikes are concerned. This is why I think the market will continue to be very volatile, simply because we are waiting around to see whether or not the Federal Reserve can do anything, and more importantly with their statement will be after the announcement this month.
If we can get above the 1.13 level, I feel that at this point in time the market will then go to the 1.15 level. I would be willing to buy above the 1.13 level because of this, and hang onto the trade for a little bit longer than I am in the yellow box that you see on the chart that is accompanying this analysis. I have no interest in selling at the moment but will look at daily candles in case there is an opportunity for short-term selling to keep within the well-established range that we are stuck in at the moment.
