The EUR/USD pair initially rallied during the Wednesday session, but as you can see the 1.30 level brought out a lot of sellers, and we close much lower. This massive shooting star of course suggests significant weakness, but the 1.28 level below should continue to be supportive. In other words, we believe that the choppiness will continue, especially considering that the move was in reaction to the Federal Reserve Chairman speaking in front of Congress during the Wednesday trading hours. Essentially, he had suggested that the Federal Reserve could end up pulling out of or at least cutting down on quantitative easing in the next couple of months. As federal the value of the dollar of, this of course punished this market. Until we break down significantly, we feel that this market is still range bound, even though we sell this ugly candle.
Written by FX Empire