Forex Trading Analysis Update – EURUSD

The EURUSD currency pair has seen the typical FOMC statement whipsaw price action today with a range taking in 113% of the ADR over 60days at 139 pips.  Price action traders often do well to stay clear of the markets when major event risk is due and today would likely have seen many traders chopped out of positions as the forex majors oscillated between range high and lows.

FOMC Statement And Stress Test Results

The FOMC statement was a lackluster affair –  as expected – but at 20:30 GMT the Fed advised that 15 out of of 19 major banks had passed the annual stress test.  The U.S. Dollar subsequently sold off as higher yielding currencies came into favor.  AUDUSD for example is trading near the higher end of the daily range after earlier breaking through the key 1.0500 level.  EURAUD has subsequently seen a high momentum move to the downside.

We will now look at a technical analysis overview of the EURUSD:

• Price is trading below price structure support and looks set to close the day as a bearish outside day.
• EURUSD bears will be looking towards the 1.3000 round number as an initial target if the bearish continuation candle has a confirmation break lower (below 1.3050).
• Market talk of an options barrier at 1.3050 looked to have an element of validity; price turned within 6 pips of the level on two separate occasions today.
• These kind of bearish signals are best seen at resistance and the location is less than ideal  form a pure technical analysis perspective.  The lower yellow boxes on the H4 chart also show numerous rejections from 1.3xxx levels over recent weeks and any trades taken in anticipation of further downside could see a swift reversal in the current choppy environment.
• Price is however making lower highs and the directional bias is therefore to the downside for now.

EURUSD H4

EURUSD D1