EUR/USD post FOMC: levels to watch by Mary McNamara

The EUR/USD put in a bounce after FOMC but it might take a little while for the dust to settle and for any new directional move to be sorted out. This post is simply about what I’m seeing and the levels I’m watching.

 E/U 4hr: I tweeted earlier today about how the region of the 61.8% fib near 1.11 and the 4hr 200 EMA might be a target but little did I know then just how soon that target would be reached! Price spiked up there not long after Janet Yellen’s speech. This region remains the key area to watch:

  • A respect of this 1.11 would suggest the pullback has been short and that bearish continuation might continue.
  • A close and hold above this though might signal more follow through for this bounce move.

I do note however that, despite this huge move, I don’t have any new TC signal to go long here!

EU4

E/U daily: If price action moves and holds up through the 1.11 level then I would be looking for a test of the previous S/R level at 1.18.

EUdaily

E/U 4hr Cloud: price is above the 4hr Cloud and any hold above this support would be encouraging for further bullish follow through with this current move:

EU4hrCloud

E/U daily Cloud: now the daily Cloud is rather interesting. The 1.11 level is below the daily Cloud but the 1.18 level is near the top of the daily Cloud. So, any move and hold above the 1.18 and daily Cloud region would have to be taken as a rather bullish signal:

EUdailyCloud

E/U monthly: the monthly candle has a while to go before it closes but I’m keeping an eye on this candle until then. The 61.8% retracement Fib of the 2000-2008 bull move is a long way off near 1.2 BUT and monthly close back above this level would be a significant bullish signal. Such an event would also result in the formation of a bullish-reversal ‘Hammer’ style candle printing which would add to improved sentiment here. I’m not predicting this at all but simply suggesting traders keep an eye on this candle as the month progresses.

EUmonthlyCloud

Summary: Watch the 1.11 level for clues as to how the E/U will move on from this point following the FOMC spike action as this level is recent S/R and near the 61.8% fib of the latest bear move and near the 4hr 200 EMA:

  • A respect of 1.11 would suggest bearish continuation.
  • A break and hold above 1.11 would bring the 1.18 level and top of the daily Cloud back into focus.

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