EUR/USD Forecast: Euro buyers hesitate ahead of FOMC Minutes
- EUR/USD extends its sideways grind at around 1.0850 on Wednesday.
- The near-term technical outlook highlights waning interest from buyers.
- Federal Reserve will release the minutes of the April 30-May 1 policy meeting later.
EUR/USD fluctuated in a tight range on Tuesday and closed the day virtually unchanged. The pair continues to move up and down in a narrow band at around 1.0850 early Wednesday as investors refrain from taking large positions while searching for the next catalyst.
After opening in the negative territory on Tuesday, Wall Street's main indexes closed marginally higher. The improvement seen in risk mood made it difficult for the US Dollar to gather strength during the American trading hours and allowed EUR/USD to hold its ground.
Euro PRICE This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.19% | -0.22% | 0.55% | 0.32% | 0.47% | 0.31% | 0.39% | |
| EUR | -0.19% | -0.44% | 0.42% | 0.14% | 0.33% | 0.13% | 0.22% | |
| GBP | 0.22% | 0.44% | 0.72% | 0.58% | 0.76% | 0.56% | 0.64% | |
| JPY | -0.55% | -0.42% | -0.72% | -0.25% | -0.07% | -0.22% | -0.15% | |
| CAD | -0.32% | -0.14% | -0.58% | 0.25% | 0.11% | -0.01% | 0.08% | |
| AUD | -0.47% | -0.33% | -0.76% | 0.07% | -0.11% | -0.20% | -0.10% | |
| NZD | -0.31% | -0.13% | -0.56% | 0.22% | 0.00% | 0.20% | 0.08% | |
| CHF | -0.39% | -0.22% | -0.64% | 0.15% | -0.08% | 0.10% | -0.08% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The economic calendar will not offer any high-impact data releases on Wednesday. In the late American session, the Federal Reserve (Fed) will release the minutes of the April 30-May 1 policy meeting.
Market participants started to lean toward a 25 basis points Fed rate cut in September following the April inflation data. The Fed's publication will show discussions among policymakers that took place before the release of the April Consumer Price Index (CPI) data. Hence, the minutes are unlikely to provide any important clues regarding the rate outlook. Nevertheless, in case markets adopt a cautious stance, the USD could stay resilient and cause EUR/USD to stretch lower.
On Thursday, S&P Global will release the preliminary May Manufacturing and Services PMI reports for Germany, the Eurozone and the US.
EUR/USD Technical Analysis
EUR/USD trades in the lower half of the ascending regression channel coming from mid-April and the Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly below 50, reflecting buyers' hesitancy.
1.0840-1.0830 (50-period Simple Moving Average (SMA), Fibonacci 61.8% retracement of the latest downtrend) aligns as first support before 1.0810-1.0800 (lower limit of the ascending channel, static level) and 1.0785 (100-period SMA).
On the upside, first resistance is located at 1.0870 (mid-point of the ascending channel) ahead of 1.0920 (upper limit of the ascending channel) and 1.0940 (static level).
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Read more.Last release: Wed Apr 10, 2024 18:00
Frequency: Irregular
Actual: -
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
