EUR/USD Forecast: Retaining the bullish stance ahead of Fed’s decision
EUR/USD Current Price: 1.1729
- US CB Consumer Confidence resulted in 92.6 in July, down from 98.3 in the previous month.
- The US Federal Reserve will announce its decision on monetary policy this Wednesday.
- EUR/USD is holding on to gains and bullish, despite the current absence of bullish momentum.
The American dollar recovered some ground this Tuesday, but its gains were modest rather a corrective recovery than a sudden appetite for the greenback. The EUR/USD pair fell to 1.1698, to later recover to the current 1.1730 price zone, around which it spent most of the US session. The macroeconomic calendar had little to offer, as the only relevant news was the US CB Consumer Confidence, which resulted in 92.6 in July, down from 98.3 and missing the market’s expectation of 94.0. Also, and without previous notice, the US Federal Reserve announced the extension of its emergency lending facilities through Dec 2020, extending it for three months.
This Wednesday, the focus will be on the US Central Bank. The Fed is expected to maintain its current policy unchanged, adopting a wait-and-see stance after the massive stimulus announced these last few months. Nevertheless, and as coronavirus cases in the US continue to soar, uncertainty over the economic future could trigger a response from policymakers. As usual, chief Powell will offer a speech, from where investors will likely take the most clues.
EUR/USD short-term technical outlook
The EUR/USD pair maintains its bullish stance despite the absence of momentum in the short-term. The 4-hour chart shows that the pair keeps developing above a firmly bullish 20 SMA, currently providing dynamic support around 1.1680. Technical indicators have retreated from extreme levels, with the RSI currently consolidating around 67 and the Momentum heading marginally lower well above its midline. The corrective decline could gather pace once below the mentioned 20 SMA, while bulls will give in another push once the pair surpasses the 1.1780 high.
Support levels: 1.1710 1.1670 1.1615
Resistance levels: 1.1780 1.1815 1.1850
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
