The EUR/USD pair fell during the session on Thursday but found support at the 1.3250 level in order to bounce and form a hammer. That being the case, it appears this market is well supported and they do think that we will continue up towards the 1.34 handle in the short term. Whether or not we get above there is an another question altogether, as I think we will have to find out what's going on with the Federal Reserve between now and then to do so. However, there is a short-term trading opportunities we might as well take it on a break of the top of the hammer from the Thursday session.
If we managed to break down the bottom of the hammer from the Thursday session, I would tend to believe that this market would fall down towards the 1.32 handle first, and then possibly the 1.31 handle. We could even go lower than that, but that's getting a bit ambitious at this point. After all, just as we don't know what the Fed is going to do to the upside, we don't know what the Fed is going to do to the downside.
Federal Reserve will drive this pair
The Federal Reserve will drive this pair going forward, but as you can see there is a lot of confusion out there in the marketplace. On top of that, there are a lot of rumors, headlines, and general gossip they can throw this market around as well. With that being the case, be very careful with any positions at you taking should probably keep them a bit on the small side. After all, there's no point in taking a massive loss on what you essentially are guessing that the central bank will do. It's a great way to lose money, and it's not a great way to trade.
That being said, I do expect bullish action overall though for the next couple of days, based solely upon the hammer that we formed for the Thursday session.
