Looking at the upcoming Wednesday session, without a doubt the largest announcement out there is going to be the FOMC Statement. While there isn’t going to be a question and answers part of the announcement, this probably signals that the Federal Reserve is going to stay the course and suggest that there is one rate hike coming this year, and that the rest will continue to be “data dependent.”
On the other hand, we have the Greek debt solution that has come to pass, although we say that with tongue-in-cheek. It is probably only a matter of time before the Greeks end up front and center when it comes to headlines, but at least for the moment the markets seem to be somewhat placated. With this, the Euro showed signs of strength during the session on Tuesday.
EUR/USD technical analysis: Hammer time!
Looking at this chart, you can see that we formed a hammer for the daily candle, right at the 1.10 level. This is essentially what we think is “fair value” for the Euro at the moment, as we find yourselves consolidating between the 1.08 level on the bottom, and the 1.12 level on the time. Because of this, 1.10 attracts both buyers and sellers. The fact that we found the market falling to that area and attracting buyers during the session on Tuesday is a good sign that we will probably continue to go higher.
We believe that the 1.12 level will be targeted, but the 1.11 level will probably cause a little bit of resistance. We expect choppy trading going forward, and with the fact that we are getting fairly close to the slowest time of the year when it comes to trading outside of Christmas, we feel that choppiness will be the norm for the next several weeks. With this, we keep our trades small and our expectations the same.