U.S. Cash Open Brief: Pre-FOMC Trading Levels For EUR/USD

Posted Wednesday, October 11, 2017 by
Shain Vernier • 2 min read

The U.S. Federal Reserve certainly loves being front and center in the news cycle. As my colleagues Rowan and Skerdian have covered at length, the FOMC minutes are being released today. All eyes will be on the dialogue towards a December interest rate hike, and the potential impact upon U.S. equities and the majors.

Conference roomThe FED Makes News Even When The Conference Room Is Empty!


Other than the FOMC minutes, here is the economic calendar for this morning:

Event                                                             Previous                Projected             Actual

MBA Mortgage Applications (October 6)        -0.4%                     NA                     -2.1%

JOLTS Job Openings (AUG)                          6.170M                  6.125M               6.082M

These are secondary metrics, although the lag in mortgage applications does support the recent drop in U.S. real estate metrics. The lending atmosphere is changing, and that in itself may be an indication of a coming rate hike.

Today is a big day in the U.S. debt markets, with the ten year and three year note auctions. It is redundant, but I will reiterate the timing of the FOMC minutes release is at 2:00 PM EST. If you are active in the market, be sure to watch the risk quotient.


Close, But No Cigar!

Yesterday I issued a sell recommendation facing the EUR/USD. While the trade did post a decent initial gain of 25+ pips (depending upon entry), the bids eventually swept out the defined resistance level (the blue box on the chart).



For today, things are fairly simple. The USD is weakening, bringing more resistance levels into play:

  • Daily SMA 1.1885

  • Weekly 50% Retracement 1.1880

  • Round number of 1.1900

Bottom Line: Shorts from the area of 1.1880-1.1885 for the EUR/USD are likely to provide positive price action. However, with the FOMC minutes release on tap for today, I am hesitant to hold a long-term position from these levels. Scalping small points against the trend is the best approach with the FED potentially making headlines this afternoon.

News items can ruin the best trade setups. Optimal R/R scenarios and reasonable profit targets are necessities when active during volatile periods. As the FOMC minutes near, stay tuned for the latest market developments.  

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