As I have already explained in my aritcle and my last analysis, the EURUSD has been bi-directional without any clear trend except some range bound trading and selling on rallies. Last Session Recap webinar provided a 100 pip+ rejection as we saw the perfect drop from 1.1050 zone. Today we will witness a historical FOMC meeting where we could see the first change of rates since the end of 2008 and the first increase in official rates since mid 2006.
Technical levels have been very clear and today we should also pay attention to important zones/levels. As we can see in the chart the pair has been trapped within a slightly sloped upward channel with a mini channel inside it which has been broken to the downside. The pair is sitting at support while EMA89 is holding it from further upside. There are 2 scenarios which could happen JUST BEFORE, DURING and AFTER the announcement as well as during the conference itself. Please not that I expect HUGE volatility and that we might see a bi-directional movement again.
If EURUSD breaks 1.1060 to the upside we could see 1.1125 and 1.1240. The downside break below 1.0920 could expose 1.0850 and 1.0740. Intraday positioning is not advised this time. Markets are expecting 25 bps rate hike, and some guidance on step by step rate hikes in near future. But there are also other options such as: No rate hike, and no hint of rate hike in near future, 25 bps rate hike, but no future guidance of further rate hikes which are less likely but MAY happen. The volatility will probably fade pre FOMC and will resume just before the announcement.
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