EUR/USD Re-Attempts 1.1280 ahead of Fed Minutes

EUR/USD Re-Attempts 1.1280 ahead of Fed Minutes

18 May 2016, 12:46
Roberto Jacobs
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EUR/USD Re-Attempts 1.1280 ahead of Fed Minutes

The EUR/USD pair is currently retreating from new three-week troughs, although remains deep in the red amid strengthening demand for the US currency, as all eyes remain on the FOMC minutes for next direction.

EUR/USD awaits FOMC minutes for fresh impetus

Currently, EUR/USD trades -0.37% lower at 1.1272, retracing from fresh three-week lows struck at 1.1256 post-European open. The main currency pair attempts a tepid-bounce from the Eurozone CPI-led slides as markets resorted to covering their shorts, after the prices failed to breach 1.1250 support.

Euro zone April Consumer Price Index (CPI) dropped 0.2% on annualized basis, in line with the estimated decline and as compared to no growth seen in March.

Looking ahead, the sentiment on the European and US stocks will continue to drive markets ahead of the all-important FOMC April meeting minutes due later in the NA session.

Analysts at the Bank of Tokyo-Mitsubishi noted, "The minutes are likely to be less dovish signalling less concern over downside risks from global and financial market developments. It will be interesting to see if there is discussion over Brexit risks ahead of the referendum which we believe will prompt the Fed to refrain from resuming rate hikes as early as in June."

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance at 1.1300 (round number). A break beyond the last, doors will open for a test at 1.1343/50 (May 16 High/ psychological levels). On the flip side, the immediate support is placed 1.1256/44 (Daily Low &S3) below which at 1.1213/00 (Apr 25 Low/ key support) could be tested.


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