FOMC Fallout & German Elections Driving EUR/USD

EUR/USD Analysis 25 Sep 2017

EUR/USD Spot Price: 1.1928

Support: 1.1900, 1.1850, 1.1822

Resistance: 1.1975, 1.1985, 1.2000

Trade Ideas - Capitalize on Market Uncertainty

  • Position: Long
  • Entry Point: 1.1850
  • Take Profit: 1.2000
  • Stop Loss: 1.1790

The EUR/USD is still bullish however last week, we got stuck in a holding pattern which can often happen around a big event like the FOMC and we really haven’t moved far in either direction in the last week. I’m expecting more volume this week and hopefully we can secure a good price on a long entry.

Enter on a pullback below 1.1850 as that’s a key support level. If we get USD weakness there is a chance for a longer-term move to 1.2000. We’ll set our stop loss at 1.1790 and if it breaks this area I would assume the short-term momentum is nearly over.

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EUR/USD 240 min Chart - EUR/USD is range bound

North Korea, Elections & the FOMC

Last week was all about the USD and what exactly the market would do in response to changes in policy. While official interest rates were kept on hold, we did see the start of quantitative tightening and also and somewhat unexpected, the timelines for a rate hike getting moved forward. The implication for traders is that the USD now has the potential to outpace other currencies going forward. The only question is just how much of the increase has been priced in already.

Elsewhere the North Korean saga won’t go away, however there has been a big retrace in safe-haven assets. As such the impact from further missiles tests is likely to be minimal unless anything of significance ramps up.

Finally the German election has been held and it appears the incumbents will remain in power. Markets don’t like uncertainty and it appears that the Government might need additional support to make up the numbers it needs. That can lead to uncertainty and it’s something that traders can use to potentially secure a good price in our EUR/USD trade.

Key for the Week - German Election and Data

There’s a lot of data out over the course of the week of varying significance, however there are some big numbers out of Germany to watch. They include CPI and Employment as well as the obvious fallout from the election.

Technical Analysis - The Key Levels

The EUR/USD is still bullish although we have been stuck in the range between 1.1850 and 1.205. I’ll still be looking to work the bottom of the range unless we have a significant bearish announcement.

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EUR/USD - Key Levels

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