The EUR/USD pair initially tried to rally during the course of the day on Tuesday, but ended up struggling towards the end of the day. By the time we were done, we formed a shooting star of sorts, and that of course shows weakness. However, I don’t think that this market is certainly going to fall apart, quite frankly I feel that any pullback at this point in time is probably going to be thought of as a potential buying opportunity. After all, the reason we pulled back was the 1.14 level, which of course is a large, round, psychologically significant number.
I believe that any pullback from here should be thought of as value, and at that point in time I am more than willing to start buying supportive candles off of shorter-term charts. With this, I believe that the market can only be bought, simply because it does look as if the support keeps getting higher and higher, which means that we should eventually break out to the upside.
Federal Reserve
I think that the Federal Reserve is one of the biggest problems right now in this marketplace. This is because the Federal Reserve has somewhat shocked the market as it could not raise interest rates at the last meeting. Further compounding a lot of the confusion is the fact that they suggested most of the problem is around the world, and not within the United States. So that being the case, it suggests that although the US economy isn’t strong enough to start raising rates, we also have to worry about the rest of the world. In other words, as usual the Federal Reserve has been as “clear as mud.”
Once we do break above the 1.150 level though, it rips apart the top of an ascending triangle that formed on the longer-term charts. At that point in time, I believe that the trend will have ultimately changed overall. I have no interest in selling this market.
