- The euro has found itself in pretty significant trouble during the session here on Tuesday, testing a major support level in the form of the 1.15 level that also is backed up by the 50 day EMA just above it.
- So, I think it is something worth paying close attention to. Ultimately, I think this is a scenario where traders are going to be looking at this through the prism of whether or not we do break down below the 1.15 level after the FOMC.
- That will be the crucial piece. After all, the FOMC statement or meeting will give us an idea as to what it is the Federal Reserve might do in the future. A lot of traders out there are hoping for some type of reprieve from interest rates and
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It's not necessarily expected that we will get that reprieve right away, but the September meeting is still a bit of an open question for most traders. And I think it's important to get an idea as to what the tone of the statement is coming out of the Federal Reserve and Jerome Powell. If it sounds like he's nowhere near cutting rates, then that could send the US dollar much higher overall.
Ultimately, I think you have to look at this as a market that is right on the verge of trying to make a bigger decision. And if that's going to be the case, I want to be there, but it's probably going to be a situation where you are looking at this on how it closes on Wednesday to truly make that decision.
If we close above the 1.16 level, then it's likely that this market goes looking to the 1.18 level again. If we close below the 1.15 level, then I believe the Euro drops down to the 200 day EMA. We are right on the precipice of a bigger move.
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