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EUR/USD Tests 1.1500 Ahead Of The FED

Today’s forex session is best described as “active.” Formidable ranges have been observed across the majors, with traders taking a hesitant stance toward the Greenback. The EUR/USD is a prime example of this phenomenon. Rates have broken out to the bull, putting in a firm test of the 1.1500 handle. The rally comes amid a super-charged news cycle including a U.S. election and FED Interest Rate Statement.

EUR/USD Technicals

The daily technical outlook for the EUR/USD is beginning to shift after an overtly bearish October. Since rejecting 1.1300, four-out-of-five days have closed positive. This rally has produced between a 150-200 pip gain in rates and a session high of 1.1499.

EUR/USD, Daily Chart
EUR/USD, Daily Chart

Here are the levels to watch for the near session:

  • Resistance(1): Bollinger MP, 1.1461
  • Resistance(2): Daily SMA, 1.1499
  • Resistance(3): Psyche Level, 1.1500

Overview: Thursday’s FED Interest Rate Statement will bring considerable volatility to this market. Rates are expected to be held static at 2.25%. This is a foregone conclusion, but the official statement will be scrutinized in anticipation of a coming December rate hike. Traders will be looking for words such as “restrictive” or “accommodating” to gauge the FED’s tone toward policy. If the status-quo policy of gradual tightening comes into question, then traders will engage the EUR/USD in mass.

For the rest of the week, it appears that 1.1500 is going to be a key technical level in the EUR/USD. If we see a break above this psychological barrier, a challenge of October highs near 1.1600 is highly likely.

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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