Expecting the Fed meeting and the ECB president speech
This Wednesday, September 20, 2017, the next US Fed meeting will take place. Rates are not expected to grow, but the dollar may strengthen in case of positive statements by the US regulator. Is there a possibility for the EURUSD rate to reduce?
On the daily timeframe, EURUSD: D1 came out from the rising trend to neutral. Moreover, a number of indicators formed bearish signals. Downward correction is possible in case the Fed has plans to hike the rate this year, as well as in case the ECB refrains from increasing its rate in the nearest future.
- The Parabolic indicator gives a bearish signal.
- The Bollinger bands have narrowed, which means lower volatility.
- The RSI Indicator is above 50. It has formed a negative divergence.
- The MACD Indicator gives a bearish signal.
The bearish momentum may develop in case EURUSD drops below the two last fractal lows at 1.181. This level may serve as an entry point. The initial stop loss may be placed above the last fractal high, the 3.5-year high, the upper Bollinger band and the Parabolic signal at 1.21. After opening the pending order, we shall move the stop to the next fractal high following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level at 1.21 without reaching the order at 1.181 we recommend cancelling the position: the market sustains internal changes that were not taken into account.
Summary of technical analysis:
| Position | Sell |
| Sell stop | abelow 1,181 |
| Stop loss | above 1,21 |