EUR USD Poised to Retrace to 1.4266 to 1.4309

Thin market conditions and technical factors are helping to drive theEUR USD higher this morning.  Aggressive traders took advantage of thethin market conditions ahead of the FOMC announcement this afternoon toforce weaker shorts out of the market.

Daily Analysis

EUR USD

Thin market conditions and technical factors are helping to drive the EUR USD higher this morning.  Aggressive traders took advantage of the thin market conditions ahead of the FOMC announcement this afternoon to force weaker shorts out of the market.

Technically the Euro found support inside of a retracement zone formed by the 1.3832 to 1.4447 range.  This retracement zone is 1.4139 to 1.4067. 

Based on the recent top at 1.4447 and today’s low at 1.4086, this morning’s rally has the potential to rally to 1.4266 to 1.4039. 

If this currency pair is forming a top then look for new selling pressure to begin at 1.4266 to 1.4039.  Last week’s closing price reversal top is still exerting a negative influence on this market.  The first leg down following a reversal top is usually profit-taking.  The real sellers initiate positions following the first test of the top.  This move could be taking place now.

Daily Chart

Click to Enlarge Image