EUR/USD Forecast: bearish set-up ahead of EZ PMIs and FOMC minutes
|The ongoing US Dollar continued gaining positive traction on Tuesday and dragged the EUR/USD pair farther away from over last week's over 3-year tops. Jittery equity markets, coupled with surging US Treasury bond yields were seen as key factors underpinning the greenback demand.
Investors on Wednesday will focus on the latest FOMC monetary policy meeting minutes, which will provide important clues about the central bank's monetary policy stances, interest rate trajectory, and outlook on inflation and economic growth. Ahead of the key event risk, the flash version of Euro-zone PMI figures for Feb. and existing home sales data from the US might provide some short-term trading impetus.
From a technical perspective, the recent slide adds to the credence of a tentative double-top chart pattern formation on daily charts, which would be confirmed once the pair decisively breaks below an important horizontal support near the 1.2200 handle.
In the meantime, bears would be eyeing for a decisive break through the 1.2300 mark, below which the pair is likely to accelerate the fall towards 1.2260-55 intermediate support en-route the 1.2200 key support. On the flip side, any recovery attempt might now confront fresh supply near 1.2365 level and is followed by resistance near the 1.2400 handle. Any subsequent up-moves now seems more likely to be capped near the 1.2430-35 resistance zone.
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