Technical Bias: Bullish
Key Takeaways
US dollar dumped post FOMC meeting minutes despite positive indications from the Fed members in the minutes released.
Euro breaks key resistance against the US dollar to trade higher.
EURUSD support seen at 1.3620-30 and resistance ahead at 1.3660.
The Euro moved lower against the US dollar post FOMC meeting minutes release, but later the reversal in U.S. yields took the US dollar lower against all major currencies, including the Euro.
Technical Analysis
There was a critical triangle forming on the hourly timeframe for the EURUSD pair, which was holding the upside in the pair. Moreover, the 200 hourly simple moving average (SMA) was sitting just above the highlighted triangle, which was adding to the bearish pressure. However, the Euro buyers managed to break both barriers and closed above the crucial 1.3630 resistance zone. This particular break has set the tone for additional gains in the pair. If the pair moves a bit lower from the current levels, then the broken resistance zone might act as a support around the 1.3630 level, which also coincides with the 200 hourly SMA. If buyers fail to hold the mentioned support level, then a move back towards an important swing support area at 1.3600 is possible in the near term.
However, the chance of a bounce from the 1.3630 level is quite high, and if that happens, the pair might challenge the 61.8% fib retracement level of the last drop from the 1.3702 high to 1.3574 low. Any further strength might take the pair towards the last high of 1.3702.
French CPI and ECB Monthly Report
Today during the London session, the French Consumer Price Index (CPI) will be released by the French National Institute for Statistics and Economic Studies. The forecast is slated for a small rise of 0.2% in the French CPI. Moreover, the European Central Bank's (ECB) monthly report will also be published, which would highlight current and future economic conditions. Both these events can cause some swing moves in the Euro.
Overall, as long as the pair stays above the 200 hourly SMA more gains are likely moving ahead.
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