FOMC Minutes Preview: What to Expect of EUR/USD?
The Federal Open Market Committee will publish the minutes of its April
meeting at 18:00 GMT and investors will be scrutinizing the Fed’s
language for signs on whether the bank plans to tighten policy further
in June. The FOMC took a cautious stance at its April meeting,keeping
options open for June.
Last Fed meeting took place before the release of May nonfarm payrolls report - which came in below expectations at 160K - and strong US inflation data. Investors are still digesting CPI numbers and some hawkish comments from Fed officials earlier this week.
What to expect of EUR/USD?
Main focus should be on what conditions the FOMC indicate will be needed for a hike rather than explicit timing reference. Any sign the Fed is not ready to raise rates in June or July will likely weigh on the greenback and viceversa.
Ahead of the minutes, EUR/USD was trading near monthly lows around 1.1270 amid broad USD strength. As for technical levels, immediate supports are seen at 1.1255 (Apr 26 low) and 1.1214 (Apr 25 low) ahead of 1.1147 (100-day SMA). On the other hand, resistances could be found at 1.1315 (50-day SMA/May 18 high), 1.1364 (10-day SMA) and 1.1379 (May 13 high).