Can any of you guys predict the forex market? Are you good at guessing the right timing of the moves, the direction of them and the size of the moves? I can´t predict the market and neither can the weather guys predict the weather but I can use the technical and fundamental analysis and use my instincts which I have developed over the years to forecast the forex market and increase the odds of winning, just like the weather guys use technology to forecast the weather.
So, what can we make of this USD strength that we have witnessed in the last two days? The FED meeting is scheduled on September 21st and although the odds of an interest rate hike in that meeting stand at only 26% the forex market is feeling afraid of a surprise rate hike. There´s definitely fear in the market at the moment and the forex traders are liquidating their short USD positions. NBetter safe than sorry eh?
That´s the feeling I have been sensing in the market, especially today, which is a fundamental indicator. But, FED´s Rosengren just appeared live saying that it´s not likely the FED/FOMC increase the interest rates too fast. Just to remind you, a rate hike in September is too early for him.
Besides him, the other FED member Tarullo is also on the screen making dovish comments and he´s a governor too. Fundamentally, the comments of these two FED guys go against the market sentiment.
Technically, EUR/USD is just above the support level which comes at 1.1200-10. A bunch of moving averages stands just below there on the H4 forex chart. Today is Friday and the London session is almost over, so there´s a case for an end to this relentless USD buying.
Will the support level stop the USD bulls?
After a wobble in the last hour, the price has consolidated now and the position squaring for the weekend might be over. We hope for a retrace higher on Monday before the next step lower, because we opened a buy forex signal in this forex pair a while ago.