The EUR/USD pair had a volatile session as one would expect, as the FMOC meeting certainly would have taken the limelight. Anytime there is uncertainty in the market like this, a lot of traders will push the markets around simply trying to get out of the way. After all, when you don’t know the result of something, you’re better off on the sidelines. This is what I did for the session, but cannot help but notice that the candle for the session is pretty much a perfect hammer.
The biggest problem though is the fact that we have had a couple of shooting stars recently, and this tells me that the markets going to continue to go nowhere. Even if we do break out in one direction or the other, the overall market itself is tight, so quite frankly this is a pair that I’m not that interested in at the moment.
Short-term trading only
Short-term trading will be the way this market moves more than likely, as I believe we are currently trading between the 1.35 level and the 1.37 level. Even if we break above the 1.37 level, I see resistance of the 1.38 level, and as a result it’s going to be very difficult to hang onto a trade for anything more than a short-term gain. That being said, we will eventually break out in one direction or the other, and that could very well be a significant move as there is so much in the way of inertia building up in this market.
However, until we get some type of clarity either out of the Federal Reserve, or possibly the ECB, it’s very difficult to imagine that this market’s going to be easy to trade. After the announcement, the Federal Reserve essentially said that it was not necessarily going to stick to the statement that a 6.5% unemployment rate would be needed to get out of the tapering game. If that’s the case, then it seems that we have even less clarity than before, which is quite a feat in and of itself.
