EU was hovering around 1.0200 for most of this week. Bulls were failing above 250 and bears were failing below 150, so the range was pretty tight and great for scalpers. That will most likely change next week as we have a FED meeting on wednesday and a 75 bps hike is expected. That is pretty much already priced in. What wasn’t priced in was the ECB hike this week…where the market expected a 25 bps hike and ECB surprised with a 50 bps one! BUT euro bulls were so tired by that time, they couldn’t manage to stay above 250. The daily chart is a problem for the bulls, and the H4 chart looks “overbought”, too. So I wouldn’t be surprised if we broke below 150 next week…and re-tested parity before or during FED. If that happened, the parity area might give us another good opportunity to go long. Because even though FED will most likely hike by 75 bps…imagine what would happen if they only did a 50 bps hike. And it can easily happen, with the current bad economic numbers. But its a FED week…the best and safest way to make money is to stay away from trading until wednesday. And by then the chart will be clear and it will be an easier choice if to go long or short on euro, because right now at 200, we can go 150-200 pips up and down and both moves would make sense.
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