The EUR/USD pair initially tried to rally during the course of the day on Friday, but as you can see we really struggled near the 1.15 handle. This is an area that has been massively resistive lately, and we think that the action on Friday only reinforces this premise. After all, if we can break above there the market should find plenty of buyers, as it would of course attract a lot of attention due to the fact that it was breaking above a large, round, psychologically significant number.
However, during Friday we saw the market turned back around and slam into the 1.13 level. There is a hammer there from a couple of days back, so there is support but I think this is a market that is simply waiting to take your money at the moment. Volatility is great, but when it’s just simple chop back and forth, it’s a great way to lose in the end. Unless you are an ultra-short-term trader, it’s going to be very difficult to make money in this market at the moment.
Federal Reserve confusion
Well, one of the things that the Federal Reserve promised to do was to become more transparent. It has done that in a sense, as it has shown that it doesn’t know what to do about the economic situation around the world, as it relates to the United States. I cannot help but think that some of the “doomsayers” such as Peter Schiff haven’t been correct all along when it comes to central bankers. After all, they couldn’t even raise the interest rates 1/8 of a percent in order to get things moving in the correct direction. With that, they stated that they were worried about global conditions more than anything else, and basically “passed the buck” down the road as we now could very well see interest-rate hikes in 2016 instead. At this point in time, I think the market will favor the Euro, but there is just far too much in the way of confusion to place a trade for any real length of time. Over the next couple of sessions, I anticipate that we will bounce around between the 1.13 level and the 1.14 level.
