Let the Fed set direction and then we will follow along June 20th

Hi and welcome to our EUR/USD brief for today
Yesterday we saw the market rally up to higher levels than we had expected despite disappointing news out of Germany and terrible news from Spanish bond auctions.

Context
The move up suggests that the market is expecting to see further stimulus from central banks and a positive announcement to that effect from the FED meeting which wraps up today and next week’s ECB meeting. It’s unusual to see this risk on approach so far before the announcement and I suggest caution while this plays out. Fed announcements start from 4.30 this afternoon and I would suggest caution until after them.
Spanish borrowing costs are rising again and they simply can’t afford the cost of debt to keep rising.

Technical Analysis
Pivots remain mixed with daily pivot well to the bullish side and joining monthly pivot. We have our lower low on the 4H chart which I still think is important. Its the first lower low for some time.

 The question is has the market put in the lower high, or is this just a hesitation before we see a push up and a higher high. The situation isn’t clear until we have either the higher high (bullish) or we have a push back up that yields a lower or the same low.
WE are again in the market where its waiting and its unlikely to give us a clear answer until at least the fed statement is made.

The Day Ahead –
I was always having today off and it appears (for once) to be good timing. Let the fed set the direction then we will go along for the ride.
Bias- Unclear and waiting, today the market isn’t talking to us, we need to be patient and wait for the better trading opportunities that will come.
Short entry: Would be possible if daily pivot is broken, and then we see price retest and then continue short. We would be looking for a lower high, with a price action confirmation (High test), and WP as a possible target. WE would as many confirmations as possible, and would wait for a conservative entry.
Long Entry- Would be possible on a bounce off the pivots currently being tested, but entry would need to be a higher low at or above 1.2677 line.

News Today GMT
4:30pm USD FOMC Statement
6:00pm USD FOMC Economic Projections
6:15pm USD FOMC Press Conference

All the best
PLB