For the moment, it appears that the markets are unphased by the double-talk from Wednesday’s FOMC Minutes release. In the midst of the FED possibly backing off of the Greenback due to U.S./China trade war concerns, forex players are bidding the USD heavily. Gains against the Euro, Japanese yen, Swiss franc and Australian dollar have highlighted the session.

We may be witnessing a delayed effect of the FED taking a more passive approach to the USD. The last week has been a tough one for Greenback bulls — today’s rally may simply be a blowoff of the pressure or profit taking.

EUR/USD Technicals

The great thing about trends is that they are always due to pull back. If we see today’s sell-off in the EUR/USD extended tomorrow, then a buy from Fibonacci support will be a solid way to enter this market.

Given the changes in FED outlook toward the USD, weakening values in the intermediate-term are likely. A return to the June/July 1.1700 value area may be in the cards for September.

Here are the levels to watch for the remainder of the session:

• Resistance(1): Daily SMA, 1.1598
• Support(1): Bollinger MP, 1.1563
• Support(2): 38% Current Wave Retracement, 1.1499

Bottom Line: As of press time, the EUR/USD is trading in a non-committal zone between the Daily SMA and Bollinger MP. It is a tight market and one that is likely to extend on tonight’s German GDP or FED Chair Jerome Powell’s Friday speech. Either way, this market is not staying within today’s range for much longer.

If we see a nice retracement from Wednesday’s high, then a buy from just above the 38% retracement level is a valid market entry. Longs from 1.1506 with an initial stop at 1.1449 produce 50 pips using a sub-1:1 risk vs reward ratio.

It appears that a return to 1.1700 may be in the cards for next week. A pullback to the 1.1500 handle is a nice opportunity to go long.