Post-Jackson Hole Distribution, FOMC Week.
The last several weeks have given us a clean example of why I separate **direction, liquidity and delivery**.
EUR/USD spent July and most of August progressively repricing higher.
We first removed **1.15809**, then **1.16143**, and eventually delivered into the larger external objective at **1.17116**.
That bullish sequence did its job.
But once 1.17116 became available, the market failed to establish acceptance above it. Jackson Hole then provided the fundamental catalyst for the first meaningful change in delivery.
Since then, EUR/USD has stopped expanding and begun rotating back through the structure.
This week we are trading around **1.1550**, and my attention has shifted decisively towards the lower portion of the current range.
The area I have marked as **LRLR around 1.1490–1.1510** is now the location I am most interested in.
Not because price is mechanically required to trade there.
Because the structure above it is beginning to lose the characteristics that previously supported continuation.
---
# What has changed?
The important development is not today's bearish candle in isolation.
It is the sequence that preceded it.
After rejecting 1.17116, EUR/USD formed a series of lower daily highs and repeatedly failed to reclaim the upper arrays around approximately:
**1.1610–1.1640**
Price attempted to stabilise there several times.
Each attempt introduced buying.
None produced renewed expansion.
We are now trading back beneath the internal support around **1.1570–1.1580**.
Within EXODUS, that matters.
A bullish market does not simply need buyers.
It needs those buyers to produce **consequence**.
If repeated buying enters but price becomes increasingly incapable of progressing higher, then the important information is not the existence of demand.
It is the market's inability to translate that demand into higher prices.
That is the condition I am watching now.
---
# The fundamental environment has shifted again
This week is dominated by one event:
## **Federal Reserve, Wednesday 16 September**
The market is now heavily positioned for the Fed to **raise the federal funds target by 25 basis points to 3.75%–4.00%**.
A Reuters poll published Monday found that **86 of 101 economists** expected the increase, while market pricing implied roughly a 90% probability. Only a week ago, the outcome was much less certain. ( )
That change is important.
The market has rapidly repriced from:
**“The Fed may be finished”**
towards:
**“The Fed may be restarting a tightening cycle.”**
And this has happened while EUR/USD is already losing its higher-timeframe bullish delivery.
That creates alignment between the technical condition and the macro repricing.
---
# Why did Fed expectations change so quickly?
Inflation is refusing to cooperate.
August US CPI increased **0.4% month-on-month and 3.4% year-on-year**, while core CPI increased 0.3%.
The combination of stronger inflation, resilient employment and another large increase in energy prices has made it increasingly difficult for the Fed to justify remaining on hold. ( )
US labour conditions have also improved from the weakness we saw earlier in the summer.
August payrolls increased by **162,000**, the strongest increase in five months, while weekly jobless claims remain historically low around 206,000. ( )
This matters because one of the main arguments against further Fed tightening was the possibility that restrictive monetary policy was beginning to materially damage employment.
The latest data has reduced that concern.
Inflation remains too high.
Employment remains relatively resilient.
That gives the Fed considerably more room to tighten.
---
# Oil changes the equation
The other important input is energy.
Brent crude has moved above **$108 per barrel** as conflict in the Middle East continues to disrupt supply and increase concerns around the Strait of Hormuz and Saudi infrastructure. ( )
This creates another inflationary impulse for both the United States and Europe.
But the FX impact is not symmetrical.
Higher oil prices can reinforce ECB tightening expectations, but they can simultaneously create:
* Safe-haven dollar demand
* Higher US inflation expectations
* Higher Treasury yields
* Lower global risk appetite
* Demand for dollar liquidity
That is exactly what we are currently seeing.
The US dollar index moved to a two-week high on Monday as geopolitical risk and expectations of Fed tightening combined. ( )
---
# US yields are confirming the shift
The US 10-year Treasury yield has now moved through **5%**, its highest level since 2023.
That is a major development for FX.
Higher Treasury yields increase the relative return available on dollar-denominated assets and increase the opportunity cost of holding lower-yielding currencies.
More importantly, the move reflects a repricing of the entire future US rate path.
Markets are no longer debating only whether Wednesday produces one hike.
Interest-rate futures are beginning to price the possibility of **several additional increases through 2027**. ( )
This is the kind of repricing that can fundamentally change a currency trend.
---
# But the ECB is tightening too
This is where EUR/USD becomes more nuanced.
The ECB raised its deposit facility rate by **25 basis points to 2.50% last Thursday**, its second increase of 2026. ( )
The ECB also revised parts of its economic outlook higher.
It now expects euro-area GDP growth of around **0.9% for 2026 and 1.4% for 2027**, while inflation is projected to average 3.0% this year and remain around 2.5% in 2027. ( )
Markets are therefore still pricing additional ECB tightening.
That prevents me from treating EUR/USD as structurally bearish on fundamentals alone.
Both sides are tightening.
The question is:
### **Which central bank is being repriced faster?**
Right now, that answer appears to be the Fed.
And FX trades changes in expectations much more aggressively than it trades the absolute level of rates.
---
# EXODUS: why the reaction at 1.17116 mattered
Let's return to the chart.
**1.17116** was our external DOL.
Price reached it.
Additional buying became executable.
Breakout participants bought.
Stops from short positions became market buys.
Momentum systems received confirmation.
And yet the market could not continue materially higher.
This tells us something.
It means the liquidity made available around the high was met with sufficient opposing interest to prevent further expansion.
Then came bearish consequence.
This is why I do not teach:
**“BSL taken = short.”**
The useful information comes afterwards.
In this case:
**Liquidity became available
→ price failed to maintain higher value
→ bearish displacement developed
→ retracements repeatedly failed
→ lower prices are now being accepted**
That sequence has considerably more information than the sweep itself.
---
# The current range
The immediate structure I am working with is roughly:
**Upper extreme:** 1.17116
**Bearish array:** 1.1610–1.1640
**Internal pivot:** 1.1570–1.1580
**Current range equilibrium:** approximately 1.1530
**LRLR:** approximately 1.1490–1.1510
EUR/USD is currently sitting just above equilibrium.
This makes the current location considerably less attractive for initiating fresh shorts than the rejection from 1.1620 would have been.
The DOL can still be lower.
But execution requires location.
---
# Weekly bias
For this week, my bias is:
## **Bearish while EUR/USD remains beneath 1.1610–1.1640.**
The immediate objective is the lower-efficiency area around:
### **1.1490–1.1510**
This is the LRLR currently marked on my chart.
It is the first location where I expect the character of the move to become considerably more important.
I am not predicting an automatic reversal from there.
I want to observe whether the market begins finding sufficient opposing interest to slow the current bearish delivery.
---
# Why LRLR matters here
Within EXODUS, LRLR is not simply a support line.
The area becomes interesting because of **how price previously moved through it**.
Where price moves quickly, the market has often demonstrated relatively little two-way trade.
That leaves an inefficient section of structure.
If price returns, the market may need to discover whether substantially more business can now be facilitated there.
That creates opportunity.
But once again:
**The level itself is not the trade.**
The response is.
---
# Scenario 1: continuation into LRLR
This is my preferred immediate scenario.
EUR/USD remains beneath approximately **1.1580**, intraday retracements struggle to maintain bullish delivery, and price continues into:
### **1.1490–1.1510**
Once there, I reset my bias.
I am no longer interested in blindly holding a bearish expectation simply because price arrived at my DOL.
I want to observe:
* Does selling continue efficiently?
* Do lower wicks begin appearing?
* Does DXY continue making corresponding highs?
* Can bearish displacement maintain acceptance beneath 1.1500?
* Do we see bullish injection?
* Does that injection produce consequence?
That determines the next trade.
---
# Scenario 2: LRLR fails completely
If EUR/USD trades through the LRLR with aggressive displacement and begins accepting beneath approximately **1.1490**, then the current correction is becoming much more significant.
The next major structural reference becomes the previous breakout region around:
### **1.1460–1.1480**
This is extremely important.
This was the area from which the August bullish expansion accelerated.
A market genuinely repricing lower should be capable of trading back into this structure.
If buyers cannot defend it, the probability of a much deeper range rotation begins increasing.
---
# Scenario 3: the Fed produces a dollar reversal
Wednesday creates the obvious alternative.
A 25bp Fed hike is now overwhelmingly expected.
That means:
### **The hike itself is not necessarily bullish USD.**
This distinction matters enormously.
If nearly everyone already expects the Fed to raise rates, then the information is already reflected in price to some degree.
What matters becomes:
**What happens next?**
If Chair Kevin Warsh raises rates but communicates that further tightening will depend heavily on incoming data, Treasury yields could fall.
The dollar could weaken.
EUR/USD could squeeze aggressively higher.
This is the classic:
**Hawkish action, dovish interpretation**
scenario.
Reuters specifically notes that a decision to leave rates unchanged would be a major negative surprise for the dollar, while even a “dovish hike” could pressure USD. ( )
---
# The FOMC scenario map
Wednesday is therefore less about predicting whether the Fed hikes.
It is about evaluating **the distribution around expectations**.
### Fed hikes + signals more hikes
Most bullish scenario for USD.
I would expect EUR/USD to continue towards the LRLR and potentially attack **1.1460–1.1480**.
### Fed hikes + neutral communication
This becomes more difficult.
Much of the hike is already priced.
EUR/USD could initially move lower and then retrace as participants take profit.
### Fed hikes + dovish language
This creates the strongest squeeze risk.
If Warsh suggests the hike is precautionary rather than the beginning of an aggressive cycle, the dollar could unwind quickly.
Then the critical EUR/USD levels become:
**1.1580**
followed by:
**1.1610–1.1640**
### Fed unexpectedly holds
This would be a significant surprise.
The dollar would likely sell aggressively unless the hold was accompanied by an extremely hawkish explanation.
EUR/USD could quickly return into the upper daily arrays.
---
# Monday
Monday is primarily positioning.
EUR/USD has already opened the week with significant bearish delivery.
Oil is higher.
The dollar is stronger.
Fed hike expectations are close to fully priced.
I have no interest in chasing an extended daily candle into the lower portion of the range.
The better question is whether an intraday retracement develops before Wednesday.
If so, I am watching how price interacts with:
### **1.1570–1.1600**
Failure there would provide a much cleaner bearish condition than simply selling the low.
---
# Tuesday
Tuesday is the day before FOMC.
This is normally where I become substantially more selective.
Large institutions begin adjusting exposure ahead of Wednesday.
Options hedging becomes more important.
Dealers reduce inventory.
Liquidity can become less consistent.
That means apparent intraday breakouts can be considerably less reliable.
If the DOL has not yet been reached, I can still maintain the directional framework.
But I do not want to manufacture execution simply because I have a weekly bias.
**Planning a non-trade is still planning.**
---
# Wednesday: FOMC
Wednesday is the centre of the week.
US retail sales are also released earlier in the session, adding another input into the Fed's assessment of demand. The New York Fed calendar lists advance retail sales at **08:30 ET**, before the FOMC conclusion later that day. ( )
But the Fed dominates everything.
My approach is simple:
### Before the decision
No reason to over-position.
### During the initial release
No reason to interpret the first candle as truth.
### After the press conference begins
Watch where price can actually maintain acceptance.
That is where information begins becoming useful.
The first move can be positioning.
The second move often tells us considerably more about how dealers and macro participants interpreted the event.
---
# Thursday
Thursday becomes the first clean opportunity to trade **post-FOMC information**.
The US releases:
* Initial jobless claims
* Housing starts
* Philadelphia Fed manufacturing data
at 08:30 ET. ( )
But these releases are secondary.
The main question is whether Wednesday created a new range.
If the Fed produces dollar strength and EUR/USD accepts beneath LRLR, Thursday pullbacks become interesting bearish opportunities.
If the Fed creates a euro squeeze and EUR/USD accepts above **1.1580**, then I stop attempting to force the pre-FOMC bearish thesis.
New information overrides old analysis.
---
# Friday
Friday is mostly about determining whether the market accepts the week's repricing.
US industrial production and capacity utilisation are scheduled for **09:15 ET**. ( )
By Friday, however, the most important information should already be visible.
I want to know where the weekly candle is closing relative to:
**1.1490–1.1510**
and
**1.1580**
A close below LRLR would materially strengthen the bearish structural argument heading into the following week.
A complete recovery above 1.1580 would tell us that the Fed-driven dollar strength was unable to maintain acceptance.
That distinction matters much more than whether Friday itself produces another 50-pip move.
---
# DXY
DXY remains central to my execution.
EUR/USD is not analysed in isolation.
As EUR/USD moves into LRLR, I want to know whether DXY is simultaneously delivering through corresponding external references.
If EUR/USD makes a meaningful new low while DXY fails to make a new high, that is information.
Not an automatic long.
Information.
Likewise, if EUR/USD retraces while DXY refuses to weaken, I become sceptical of the retracement.
SMT gives us information about the **quality of delivery**.
It does not replace structure.
---
# Interbank perspective
There is also a broader liquidity issue developing beneath the market.
US 10-year yields above 5%, Brent above $108 and simultaneous tightening expectations across several major central banks are increasing the price of funding globally. ( )
This affects far more than speculative FX positions.
Banks must continuously manage:
* Dollar funding
* Cross-currency swaps
* Corporate hedging
* Bond issuance
* Client flows
* Reserve requirements
* Inventory exposure
When interest-rate expectations change this quickly, the price at which dealers are willing to warehouse currency risk changes with them.
That is what eventually appears on our charts as displacement.
We are observing the **output of the system**, not the mechanism itself.
---
# Levels for the week
### **1.17116**
Completed external DOL.
The rejection from this level remains the origin of the current bearish sequence.
### **1.1610–1.1640**
Primary daily resistance and bearish array cluster.
A sustained reclaim materially weakens my bearish thesis.
### **1.15809**
Previous external liquidity objective and important structural pivot.
### **1.1570**
Immediate internal resistance following Monday's displacement.
### **1.1530–1.1550**
Current equilibrium zone.
Price is interacting with this area now.
### **1.1490–1.1510**
**Primary LRLR and my main downside focus.**
This is where I become much more interested in the response rather than continuation itself.
### **1.1460–1.1480**
Major previous breakout structure.
Failure here would suggest the correction is becoming substantially deeper.
### **1.1350 / 1.13246**
Original range low and external sell-side.
Still structurally valid, but far outside my immediate weekly DOL.
---
# Final perspective
The story has changed again.
July was accumulation.
August was expansion.
1.15809 was delivered.
1.16143 was delivered.
1.17116 was delivered.
Jackson Hole changed the rate environment.
The ECB subsequently tightened.
US inflation remained stubborn.
Oil moved through $100.
US yields pushed through 5%.
And now the market is pricing the first Fed hike in more than two years with near certainty. ( )
EUR/USD has responded by rotating from the external high back through its internal structure.
My attention for this week is therefore lower.
**1.1490–1.1510 is the primary area I want delivered.**
But the largest mistake would be turning that expectation into stubbornness.
Wednesday can materially change the liquidity condition.
If the Fed validates aggressive tightening and the dollar maintains acceptance higher, the bearish EUR/USD sequence can extend.
If the Fed delivers what everyone already expects but cannot create additional dollar demand, then the current move may be much closer to exhaustion than continuation.
That is why I do not trade forecasts.
I build a framework and then allow the market to confirm or reject it.
**Observation → Structure → Delivery → Entry → Review.**
The DOL tells us where business may need to occur.
Liquidity tells us whether that business can be facilitated.
Delivery tells us which side currently controls the auction.
And execution comes last.
*Educational analysis only. Not financial advice.*
TITradingView Ideas14 Sept
