EUR/USD Price Forecast – sideways action on Wednesday

The Euro rallied slightly during the day on Wednesday but then pulled back a bit. I think that the market is going to continue to be attracted to the 1.1750 level, at least until we get the FOMC statement late during the Wednesday session. Once we do, we may have a bit to trade as participants will look at the statement coming out of the Federal Reserve more than anything else. It is already priced in that we would have an interest rate hike, but if they sound particularly aggressive, that could put downward pressure on this market. Otherwise, we will shift our focus to the European Central Bank today and whether it talks about stepping away from quantitative easing.

The next 24 hours should be very interesting, and dangerous to say the least. I think eventually we will get some type of clarity by the time the ECB is done, and once we have that information, it’s likely that we will have a more significant move. At this point, I think a move above the 1.1850 level signifies that we are going to the 1.20 level. Otherwise, if we break down below the 1.1650 level, that could send the market down to the 1.15 level underneath which is the massive supportive area that caused a massive bounce over the last couple of weeks. In general, I think we will have choppy action, but eventually we will get some clarity that we can follow.