EUR/USD has been drifting lower as the dollar gains ahead of the Federal Reserve's decision. Euro is well-positioned for the Fed as better prospects for the old continent make it a contender to gain significant ground, Yohay Elam, an Analyst at FXStreet, reports.

Observing the charts also provides an upbeat picture

“Jerome Powell, Chair of the Federal Reserve, may use the opportunity to pre-announce that the bank would lay down a plan for tapering its bond-buying scheme in June. That is when the Fed publishes new economic forecasts. Signaling a reduction in the current $120 billion/month in dollar printing would cause the greenback to jump. However, such an indication is far from guaranteed, and if he sticks to the script – inflation is transitory, still slack in the labor market – the US currency could suffer a fresh sell-off.” 

“Europe has finally picked up speed in its vaccination campaign and is also benefiting from falling COVID-19 cases. After Italy and France began easing restrictions, Spain will reportedly return to accepting British tourists in June.”

“Euro/dollar continues benefiting from upside momentum on the four-hour chart and is holding above the 50, 100 and 200 Simple Moving Averages. The Relative Strength Index is balanced, far from overbought conditions.”

“Initial resistance awaits at 1.2095, the daily high, and that is followed by April's peak of 1.2117. Support is at the daily low of 1.2060, followed by the round 1.20 level.”

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD consolidates in a range above mid-0.6700s

AUD/USD consolidates in a range above mid-0.6700s

AUD/USD holds steady above mid-0.6700s during the Asian session on Tuesday. The US Dollar languishes near a three-month low touched on Monday. Apart from this, the prevalent risk-on environment, bets that the RBA could be raising interest rates again and hopes for more stimulus from China lend support to the pair.

AUD/USD News

EUR/USD Monday bidding blinks as ECB rate call looms over the horizon

EUR/USD Monday bidding blinks as ECB rate call looms over the horizon

EUR/USD fell short of recent bullish momentum, pulling back sharply after a brief jump above 1.0900 to kick off the new trading week and keeping price action strung out along the top end of a descending price channel. 

EUR/USD News

Gold price holds comfortably above $2,400 amid September Fed rate cut bets

Gold price holds comfortably above $2,400 amid September Fed rate cut bets

Gold price is seen consolidating in a range during the Asian session on Tuesday. Growing acceptance that the Fed will start cutting interest rates in September keeps the US Dollar close to over a three-month low and continues to offer support to the non-yielding yellow metal. The upbeat market mood is seen acting as a headwind for the safe-haven precious metal.

Gold News

Meme coins soar in double-digit gains as PEPE, WIF, FLOKI, MOG lead the charge

Meme coins soar in double-digit gains as PEPE, WIF, FLOKI, MOG lead the charge

Meme coins are leading the crypto market again as the ripple effect of Bitcoin's recovery is flowing across major crypto categories. PEPE, WIF, FLOKI and MOG are at the forefront of the recovery, elevating their daily performance above the 20% mark on Monday.

Read more

The Trump trade

The Trump trade

The US markets may have had a mild reaction to the assassination attempt on Donald Trump at a rally in Pennsylvania at the weekend, however, there are long term ramifications for financial markets, particularly in Europe.

Read more

Forex MAJORS

Cryptocurrencies

Signatures