The EUR/USD pair had a relatively quiet session on Tuesday as we await the Federal Reserve meeting results at the end of the day today. Because of this, the market may be quiet over the next 24 hours, at least until we get not only the expected rate high, but the accompanying statement with the announcement. Traders will be paying quite a bit of attention to this statement, as it should give us an idea as to what the Federal Reserve is going to do next. There is a consensus that perhaps interest rate hikes are off the table later on in the year, and this could have a very volatile effect on this pair towards the end of the day. Between now and then, I would be hard-pressed to think that there would be a lot of trading action.
Looking at the longer-term
It appears that the longer-term outlook for this pair seems to be a bit bullish, only because we have broken towards the upside and are reaching towards the top of the consolidation area that has been a major factor in this pair for the last three years. If we do complete the consolidation range, we should go looking towards 1.15 level above, which has been massively resistive in the past and I think will continue to be so unless of course the Federal Reserve suggests that it is not going to raise rates for the rest of the year. I find that a bit difficult to believe though, so given enough time I fully anticipate that the sellers will come back in, but probably a couple of handles above here. In other words, I expect an upward bias but the volatility between now and the announcement is probably going to be all but dead.
Written by FX Empire