Upward Channel Intact!
The EUR/USD pair closed at 1.2090 after placing a high of 1.2093 and a low of 1.2056. The currency pair moved higher on Tuesday but remained consolidated ahead of the Fed decision. The U.S. dollar was mostly flat on Tuesday due to mixed U.S. macroeconomic data releases and kept the pair EUR/USD under consolidation. On Tuesday, the U.S. Dollar Index (DXY) posted slight losses for the day and reached 90.81. The U.S. Treasury yields on a 10-year note remained on the positive note and reached above 1.62%. EUR/USD pair continued moving in the upward direction and remained green throughout Tuesday amid the weakness in the U.S. dollar driven by the cautious mood of investors ahead of Fed monetary policy decision.
The FOMC April meeting has started on Tuesday, and the committee is expected to release a statement after this meeting ends on Wednesday. In its report, the latest decision about the policy taken by committee members will be disclosed, which will likely affect the prices of the U.S. dollar and drive EUR/USD pair accordingly. After the Federal Reserve monetary policy decision, the Fed, Jerome Powell, is also expected to review the U.S. economic outlook. Investors will closely watch these comments. Investors are cautious about placing any strong bid before this event, and that is why EUR/USD put minimal gains on Tuesday even it moved in a very narrow range throughout the day.
On the data front, there was no macroeconomic data released from the European side. However, at 18:00 GMT, the Housing Price Index from the U.S. dropped to 0.9% against the forecasted 1.0%. It weighed on the U.S. dollar that added further in gains of EUR/USD on Tuesday. The S&P/CS Composite-20 HPI for the year remained flat at 11.8%. At 18:59 GMT, the Richmond Manufacturing Index declined to 17 against the anticipated 22 and weighed on the U.S. dollar that added gains in EUR/USD pair. At 19:00 GMT, the C.B. Consumer Confidence rose in April to 121.7 against the forecasted 113.1 and supported the U.S. dollar that ultimately capped further gains in EUR/USD prices on Tuesday.
Another reason behind the positive movement in EUR/USD pair on Tuesday could be the news that Americans might be able to travel to the E.U. this summer if they are fully vaccinated against the coronavirus. The European Commission President Ursula von der Leyen said that return of American travelers should be possible as both sides have approved the same jabs. European nations have restricted non-essential travel from the U.S. for more than a year, and this latest news added strength in the market sentiment and supported gains in EUR/USD pair.
EURUSD Intraday Technical Levels
Pivot point: 1.2080
EUR/USD - Technical Outlook
The EUR/USD is trading at 1.2074 level on Wednesday, consolidating in a narrow trading range of 1.2065 – 1.211. The previously violated double top resistance level is now working as a support at 1.2065. On the 4-hour timeframe, the EUR/USD pair maintains an upward channel extending support at 1.2065 level along with the 20 & 50 periods EMA. Above the 1.2065 level, the EUR/USD pair’s next resistance holds at 1.2141 and 1.2240, whereas the bearish breakout of the 1.2065 level exposes the pair until the support area of 1.1998. The RSI and MACD are in a neutral zone, suggesting indecision among investors. Traders will be keeping their eyes on the 1.2065 level today. All the best!
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