EUR/USD Current price: 1.1766
- EU Industrial Production figures confirmed slowing economic growth in the region.
- US Federal Reserve to hike rates by 25 bps, attention in wording and the dot-plot.
The EUR/USD pair recovered the ground lost Tuesday an trades pretty much flat when compared to Friday's close, as investors wait for the US Federal Reserve announcement. The greenback started the day with a mild bullish bias across the board, retaining a generally positive tone. Data released so far has been discouraging for the EU, as Industrial Production fell by more than anticipated in April, posting a 0.9% decline vs. the previous 0.5% advance. Yearly basis, production rose a modest 1.7%, well below the previous 3.0% and the expected 2.8%. According to the official release, the decrease was due to falling production of energy falling, as well as consumer and non-durable goods. On a brighter side, employment increased in the EU by 0.4% in the first three months of the year, according to Eurostat. Anyway, the news weren't able to move the EUR/USD pair, which fell to 1.1729 on broad dollar's strength and bounced back a little as demand for the greenback eased as investors get ready for the Fed.
In the US, for the contrary, core PPI surged 0.3% in May, beating the expected 0.2% gain, while the YoY figure came in at 2.4%, slightly above the 2.3% expected. The US Federal Reserve monetary policy meeting, including fresh economic projections, will likely keep the market in wait and see mode, until then. The US Central Bank is largely expected to hike rates by 25 bps, with attention centered on the wording of the statement and any change to the dot-plot.
In the meantime, the short-term picture for the pair is neutral, as in the 4 hours chart, it continues trading around a flat 20 SMA and below a bearish 200 SMA, while technical indicators head nowhere around neutral readings. The immediate short-term resistance comes at 1.1820, but a more relevant one is 1.1855, the 38.2% retracement of the latest weekly slide, with a break above it required to confirm a more sustainable rally. The immediate support is the 1.1730 level, with a break below it favoring further slides ahead toward the 1.1660 region.
Support levels: 1.1730 1.1690 1.1660
Resistance levels: 1.1820 1.1855 1.1890
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