EUR/USD looks to extend gains above 1.1200 ahead of FOMC
|- EUR/USD holds on to daily gains around 1.1200.
- The greenback stays offered near 96.50.
- FOMC meeting expected to drive the sentiment later.
The shared currency is regaining some ground after yesterday’s ECB-led sell-off and is now lifting EUR/USD to the 1.1200 neighbourhood, or daily highs.
EUR/USD now focused on the Fed
The pair bottomed out in the 1.1180 region on Tuesday in response to the dovish message delivered by the ECB’s M.Draghi at the Forum in Sintra, stressing that the central bank could lower interest rates and resume its QE if the outlook on the region deteriorates further and inflation pressure remains subdued.
EUR meet some dip-buyers today after and improved mood on the US-China trade front, particularly after Trump hinted at the likeliness of a meeting with China’s Xi at the next G-20 meeting in Japan on June 28-29.
In the docket, President Draghi will speak at the closure of the ECB Forum. Across the pond, the FOMC meeting will be the salient event later today, with the centre of the debate around the ‘dots plot’, economic growth projections, trade tensions and the probability of interest rate cuts in the near/medium term.
Earlier in Euroland, the Current Account surplus shrunk to €20.9 billion in April while German Producer Prices came in on the soft side.
What to look for around EUR
The renewed dovish stance from the ECB has now become the almost exclusive driver for the price action around the European currency, relegating to a secondary role the broad risk-appetite trends, USD-dynamics and trade tensions. Furthermore, the slowdown in the region looks unremitting and reinforces at the same time the current attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate gyrating around the country’s opposition to EU fiscal rules as well as the challenging tone from LN’s M.Salvini.
EUR/USD levels to watch
At the moment, the pair is gaining 0.11% at 1.1205 and a breakout of 1.1347 (high Jun.7) would target 1.1354 (200-day SMA) en route to 1.1448 (monthly high Mar.20). On the other hand, immediate contention emerges at 1.1181 (low Jun.18) seconded by 1.1176 (monthly low Mar.7) and finally 1.1115 (low May 30).
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.