FOMC minutes to be released at 2 PM

The EURUSD has rallied from the lows ahead of the FOheMC meeting minutes to be released at 2 PM ET. The pair is now unchanged on the day.

Technically, the bias remains more negative for the pair. The price rallied to the resistance area in the early European session (between 1.0683 and 1.06905. The high reached 1.0692). The fall in the late London session, extended to new lows going back to April 15 (at 1.0622). That low happened to come right to underside of the broken trend line. The close from yesterday was 1.06415. The 38.2% -50% of the days range is at 1.0649-57. That should cap a correction before the headlines, but liquidity conditions can get "wonky" (as Mike might say).

The general thought is that the more hawkish vibe from the September statement will continue into the minutes. That statement was famous for the line "in determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress – – both realized and expected – – toward its objectives of maximum employment and 2% inflation.".

Subsequent to that statement, the employment report came out stronger. Inflation...well it will always be an "inflation expectation" thing. Both those things do not matter with regard to the minutes as they were not known at the time of the meeting and therefore the minutes.

The question after the release will be "What is left in the market's bearish tank?". Will there be enough juice to go and test the 1.0600 level and work further towards the lows from April and March at 1.0520 and 1.0461 or will the market sell the rumor and buy the fact - correcting above 1.0657 and move for another test of the 1.0683-90 and perhaps the 100 hour MA near the 1.0700 level. That area will be a strong line in the sand for sellers/bears. The price should not trade above that MA and area if the sellers are to remain in control of the bias.

The fundamentals point lower with ECB easing and Fed doing at least a "save face" tightening, but we will need to see the price action and those words "what is priced in" can always rear its head at extremes when what is expected, does not happen.