FOMC Minutes Preview, What to Expect of EUR/USD?
The Federal Open Market Committee will publish the minutes of its March
15-16 meeting at 18:00 GMT and investors will be scrutinizing the Fed’s
language after the "dot plot" chart revealed that most FOMC members
revised down their expectation for the appropriate path of the fed funds
rate.
Minutes will provide some context to the dovish policy statement and the downward revision to the dots.
Over
the last weeks, several FOMC members, including Chair Yellen have
spoken, sending mixed signals. It seems to be a growing dichotomy
between Fed’s Chair and other members and minutes might help to shed
some light over this issue.
However, all members have reiterated
that every meeting is a “live” meeting and decision on the path of
future rates remains data-dependent.
What to expect of EUR/USD?
If
minutes turned out to be less dovish than Yellen’s recent comments, the
US dollar could benefit although gains would probably remain
short-lived in the absence of a clear sign next hike is around the
corner.
On the other hand, a dovish stance and worrisome
assessment of global economic risks and financial developments will
likely have the opposite effect on the greenback.
Ahead of the
minutes, EUR/USD was trading above 1.1400 amid broad USD weakness, with
next resistances lining up at 1.1437 (2016 high, Apr 1), 1.1494 (Oct 15
high) and 1.1560 (Aug 26 high). On the flip side, short-term supports
are seen at 1.1309 (Mar 31 low), 1.1287 (10-day SMA) and 1.1251 (20-day
SMA).
(Market News Provided by FXstreet)
