EUR/USD Forecast: Scope to test February's low at 1.2205
|- Dollar retains post-FOMC's Minutes gains, poised to extend its advance.
- Macroeconomic data likely to be ignored in benefit of equities and yields as market´s leads.
The release of FOMC's Meeting Minutes triggered some wild action by the end of the US session, with the greenback initially falling, as the document was less hawkish than expected, yet coming back quickly afterward to set new weekly highs across the board, as yields up roared. The Fed was quite optimistic about economic growth, and expect it to exceed their previous estimates, although they are also concerned about inflation. Nevertheless, speculation that the Fed will need to keep rising rates sent US Treasury yields to fresh 4-year highs, with the 10-year note one flirting with 2.96%, sending stocks sharply lower and the greenback up.
The EUR/USD broke below the 1.2300 level, confined to a tight consolidative range around 1.2270 ever since the day started. The release of the German IFO survey didn´t help the EUR as it came below expected. The February Business Climate index resulted at 115.4, down from 117.6, while expectations dropped 105.4 from a previous revised 108.3.
The US calendar will bring the usual weekly unemployment claims data, a couple of Fed speakers, and the Kansas Fed manufacturing index, all of them most likely to be overshadowed by equities and yields behavior.
The pair continues trading within its early range, marginally higher, amid stabilizing equities and yields in Europe, but the risk is skewed toward the downside, according to technical readings in the 4 hours chart, as the pair broke below its 200 SMA, below it for the first time this year, while the 20 SMA accelerates south after breaking below the 100 SMA. Indicators in the same chart lack directional strength but remain well into negative territory, in line with the negative stance.
The daily low was set at 1.2259, with a break below it favoring an extension toward the 1.2205 level, this month low. Above 1.2300, on the other hand, the pair will face resistances at 1.2340 and 1.2380.
View Live Chart for the EUR/USD
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.