EUR/USD: Stay EUR/USD Long For 1.1400

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Taken Positions

EUR/USD: long at 1.1220, target 1.1400, profit locked in at 1.1230, risk factor **

EUR/USD: Watch FOMC Minutes

(stay long for 1.1400)

The USD is falling against the EUR today, as investors awaited minutes of the last Federal Reserve meeting for clues on monetary policy (18:00 GMT). September FOMC meeting was surprisingly dovish and prompted expectations the Federal Reserve might postpone an interest rate to 2016. Fed funds futures currently do not have a 100% pricing in of a fed funds rate hike to 0.25% until February of 2016. We think such opinions are too dovish and still expect a hike in December. However, today’s minutes are likely to be dovish, as they should shed some light on the reasons for delaying a rate hike.
The minutes are going to be from a meeting that was three weeks old (September 16-17). There was still more scare from China and Asia at that time, and it was even worse in the prior weeks and in August. Current Fed stance is probably slightly more hawkish than it was in September. There was only one vote to hike on the FOMC. But then came more hawkish commentary from the Fed presidents. The last stance of Yellen was that conditions appear proper for a rate hike by the end of this year.
The EUR/USD broke above the 1.1289 high on October 5 and psychological level of 1.1300 today. The next key resistance level is the 61.8% of the 1.1460-1.1105 slide at 1.1324 and then the cloud top at 1.1341. Breaking above these levels will open the way to the target of our long position.
The European Central Bank publishes its minutes at 11:30 GMT. We do not expect meaningful hints about a possible QE expansion. In our opinion the ECB minutes will not be a strong market mover today.
We have locked in the profit on our EUR/USD long at 1.1230.

Significant technical analysis' levels:

Resistance: 1.1319 (high Oct 2), 1.1324 (61.8% of 1.1460-1.1105), 1.1330 (high Sep 21)

Support: 1.1234 (hourly low Oct 8), 1.1211 (low Oct 7), 1.1173 (low Oct 6)

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