The similar story...

The story is similar for the EURUSD today as NY traders enter:

  • Narrow trading range
  • Support at the 1.1010 to 1.1022.
  • Resistance at 1.10775. The high correction after the initial move lower on Draghi has the 38.2% at this level (see chart below).

The difference today is that the 100 hour MA has caught up to the price, adding another dimension to the technical picture (see blue line in the chart above).

Now we cannot pretend that the market is not really concerned about the now, but the after - that is after the Fed statement is released. The Fed - in their desire to be transparent - has been the opposite. No one really knows what they may do. How about this idea, they abandon a rate liftoff in 2015 as growth falters (3Q GDP is looking like 1%), and inflation simply does not seem to be a concern. OF course they could ignore all that and point to a labor market that gets tighter and the Fed needs to move from "emergency levels".

Anyway, technically, the pair is in an 84 pip trading range for the week. Of course too narrow. It might be we get some liquidity move before the event, but action is likely to be after. However, be aware that if the Fed is simply the same old same old, the market will likely trade in a up and down pattern.

Other key levels out side the lows and highs for the week:

  • The 200 day MA at the 1.1113 level
  • The 100 day MA at the 1.11659 level.
  • The 200 hour MA at the 1.1208 level currently (and trending lower).

Those two topside resistance levels will be key for the technical bias going forward. If the price moves above them, it is more bullish for the pair. What would lead to this development? A Fed that gives up on the idea that there will be a liftoff in 2015.

On the downside, look for a break below the trend line and lows for the week.

Looking at the daily chart, a move lower will next target the 1.0939 level (61.8%) and then the 1.08079-1.08635 area. This was the swing lows. What could get us there? A Fed that says they will tighten in December (if they don't surprise - it is about surprises). If they continue with the "monitoring the" developments abroad/inflation/data, etc., expect choppy action.

PS the EURUSD has extended higher above the weeks high...Looks toward the 200 day MA at 1.1113.