With the news today, I'm expecting EUR/USD to be indecisive but continue its bullishness until the news. Right now we are still holding pullback structure on the higher timeframe and even though price was choppy yesterday we still saw buyers printing intraday highs.
I would be looking for buys at the same price sensitivity areas at a pullback of 1.076 or above 1.079. But then I would anticipate resistance at the liquidity zone above towards the end of the day as it may just be price set ups for the FOMC news later in the day.
Fundamental analysis
SHORT VERSION:
- Markets have been expecting a skip/pause on rate hikes for June meeting
- Unchanged rates will not hold much weight as it has already been priced into market
- Main focus of this FOMC is if there is a surprise rate hike or a strong sentiment in Powell's speech afterwards.
LONGER VERSION:
I wrote yesterday about the weight US rate decisions have been having on the markets ever since the pandemic.
What we have been seeing over the last 3-6 months is a lot of the rate hike cycles being priced into the market and also a lot of speculation about when rate hike cuts will come back into the scene.
The main expectation for today is for the FED to pause or skip the month of June, leaving interest rates unchanged. This has already been priced in and won't lead to a move if it happens. This means we may see more of a buy the rumour and sell the news type play on Dollar and see a reaction to a surprise rate hike or rate cut (with a cut being highly unlikely).
More importantly, I'm going to listen to the sentiment of Powell's statement he releases afterwards.