With the above points in mind, let’s turn over to the bigger picture. Weekly price, as you can probably see, continues to maintain a stance beyond the support drawn from the low 0.8231, which could, should a weekly close emerge, ultimately send the EUR back down to demand at 1.0333-1.0502. On top of this, the daily candles recently closed below a major at 1.0710. This might, given that the last time this level was visited it produced a 900-pip move, portend further downside to a Quasimodo coming in at 1.0557 (positioned just above the aforementioned weekly demand).
Our suggestions: According to the CME group Fed watch tool there’s a 90% chance that the FOMC will hike rates in December. This – coupled with the posture reflected on the higher timeframes, our team feels lower prices may be on the cards. Unfortunately, selling into a H4 demand is not something our team would feel comfortable with. Moreover, there’s little more than 40 pips room to play with beyond the current H4 demand till we reach 1.06! Therefore, opting to stand on the sidelines here may very well be the best path to take.
Data points to consider: US Housing data, US data, Philly Fed business outlook survey, US Jobless claims and US Housing starts all at 1.30pm. FOMC member Dudley speaks at 1.50pm, Fed Chair Janet Yellen testifies at 3pm as well as FOMC member Brainard speaks at 5.30pm GMT .