The next two days see the Federal Reserve and European Central Bank with their latest interest rate decisions and press conferences. This is a market that I am looking to short, but may have to wait.

EUR/USD

The euro was quite noisy during the trading session on Tuesday as we continue to see the market pay close attention to the 1.15 level.

If we do rally from here, I think we have a ceiling in the form of the 1.16 level. That being said, keep in mind that both central banks are going to be having an interest rate decision over the next couple of days.

Central Bank Decisions and Market Sentiment

We have the FOMC interest rate decision on Wednesday, of course, and then we have the Europeans with their interest rate decision on Thursday. Now having said that, I don't expect a change out of either one, and I don't think the markets do either, but a lot of what they'll be listening to is the tone.

So, I would expect a lot of volatility over the next couple of days and a very tight range. If we turn around and break below the 1.14 level, the bottom then falls out in the euro. If we break above the 1.1650 level, then we could see this market go looking to the 1.18 level.

Ultimately, I think this is a market that is probably more bearish than bullish as there is a geopolitical risk out there that continues to put a bit of a bid into the US dollar. Furthermore, inflation in America continues to be sticky and the Federal Reserve is now priced to cut 1 in December, but quite frankly, it wouldn't surprise me to see that disappear as well. I remain bearish, but the next day or 2 are probably going to be noisy and sideways.