EUR/USD Evaluation:FOMC Minutes dominate occasion danger as merchants search readability on the Fed’s June 16 ‘hawkish shock’ Key technical rang
EUR/USD Evaluation:
- FOMC Minutes dominate occasion danger as merchants search readability on the Fed’s June 16 ‘hawkish shock’
- Key technical ranges to contemplate forward of the minutes as bearish momentum wanes
- IG shopper sentiment stays internet lengthy hinting at bearish continuation
EUR/USD Seeks Directional Clues from FOMC Minutes
The EUR/USD pair (on the time of writing) reveals a doji candle in the course of the London session as we head into the US open. The doji candle may be reflective of indecision in a market and proper now seems to disclose a ‘wait and see’ strategy to the FOMC minutes to be launched later in the present day.
Yesterday’s sharp transfer decrease within the pair had market commentators joke concerning the FOMC minutes being launched forward of schedule. Treasury yields, the Dow Jones and S&P 500 dropped decrease whereas the US greenback gained towards its friends in a transfer in keeping with a sudden ‘danger off’ narrative.
Market members ought to obtain readability across the accelerated time-frame of anticipated price hikes within the US when the minutes are launched later in the present day.
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Key Technical Ranges to Look ahead to EUR/USD
The weekly chart frames worth motion from a long run perspective permitting larger insights into long run developments and developments. After posting a excessive at the beginning of the yr, EUR/USD had been somewhat uneven, buying and selling above and beneath the numerous 1.2000 stage.
Nonetheless, worth motion at present rests on the 61.8% Fibonacci stage (drawn from the 2018 excessive to 2020 low) with the ascending trendline in attain.
EUR/USD Weekly Chart
Chart ready by Richard Snow, IG
The day by day chart highlights the looks of constructive divergence within the RSI which can end in a slowdown within the present bearish momentum. Nonetheless, if the FOMC minutes verify a extra hawkish shift on the Fed, a transfer towards the ascending trendline (assist) and the 1.1700 stage stay on the radar.
Though hindsight is 20/20, earlier inflection factors on this chart introduced technical analysts with potential clues earlier than reversing. In January, the bearish engulfing shaped at a time when the RSI introduced detrimental divergence, signaling a possible transfer decrease. Subsequently, the chance stays that we may see a transfer increased because of constructive divergence at present witnessed on the RSI with a possible bounce off the 61.8% Fib stage or trendline assist.
EUR/USD Each day Chart
Chart ready by Richard Snow, IG
Contrarian Indicator Suggests Potential Bearish Continuation
EUR/USD: Retail dealer information exhibits 60.45% of merchants are net-long with the ratio of merchants lengthy to brief at 1.53 to 1.
We usually take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests EUR/USD costs could proceed to fall.
The variety of merchants net-long is 3.90% increased than yesterday and 25.08% increased from final week, whereas the variety of merchants net-short is 8.56% decrease than yesterday and 20.99% decrease from final week.
Merchants are additional net-long than yesterday and final week, and the mix of present sentiment and up to date adjustments offers us a stronger EUR/USD-bearish contrarian buying and selling bias.
— Written by Richard Snow for DailyFX.com
Contact and observe Richard on Twitter: @RichardSnowFX
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