EUR/USD has tumbled after Fed officials seemed keener on tapering bond buys. The euro has reasons to fight back, but will likely be overwhelmed for now, in the view of FXStreet’s Analyst Yohay Elam.

Additional Fed comments to outweigh upbeat eurozone data

“Fed Vice-Chair Richard Clarida said he wants the bank to announce a reduction of its $120 billion/month bond-buying scheme this year and added that risks to his inflation outlook are to the upside. Clarida was joined by Mary Daly, President of the San Francisco Fed. She is usually a dove. On Thursday, Fed Governor Christopher Waller is set to speak, and he may add fuel to the fire.” 

“In the old continent, German Factory Orders rose by 4.1% in June, roughly double the early expectations. Moreover, Markit's final Services PMIs also exceeded estimates, showing robust growth prospects.”

“Euro/dollar has fallen below both the 50 and 200 Simple Moving Averages on the four-hour chart. Moreover, momentum remains to the downside, adding to the bearish sentiment.” 

“Support is at the daily low of 1.1828, which is backed up by the 100 SMA. Further down, the next noteworthy cushion is at 1.1775.”

“Resistance is at 1.1850, which is the daily high and it is also where the 50 and 200 SMAs hit the price. Further above, 1.1905 and 1.1945 await EUR/USD bulls.”

 

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