The EUR/USD pair surge during the session on Tuesday to smash into the 1.25 area. This is the area that I have been suggesting for some time is the beginning of serious resistance, and should repel me Euro going forward. It is now that we will find out whether or not this actually holds true.
With the Federal Reserve releasing its minutes from the last meeting today, this could have a drastic effect on this pair. If there are any hands of quantitative easing in this release, we could see a continuation of this pair going higher. It should be noted however that the 1.27 level is the top of this resistance area, and as such there is a lot of noise to chew through.
It is because of this noise and the fact that the European Union continues to disappoint the buyers with each "solution", that I think that selling the Euro is really the only way to go. There are rumors in the marketplace right now that the ECB is about to do something drastic. We've seen this movie before, and although sooner or later they will have to - history dictates that the ECB will in fact disappoint.
Top of the rising wedge
The pair currently trades at the upper part of the rising wedge, which is also bordered by the 1.25 resistance level. It is because of this that I am looking for any signs of weakness from which to sell. In fact, I see the risk to reward ratio so strongly in the favor of the sellers that I am even willing to use one and four hour candles to do so. Simply put, it's a way to get better value with the US dollar.
However, I am aware the fact that the Euro does tend to have a sense of "hope burns eternal" about it, and as such it could be a while before I get my sell signal. My suspicion is that the Federal Reserve may in fact disappoint dollar bears, and this could be the catalyst. Nonetheless, 24 hours from now we should have quite a few answers in this market.