- EUR/USD trades flat near 1.2155 after Tuesday's 0.28% gain.
- Fed's Powell may offer clues on the timing of a potential taper.
- Hint of an early unwinding of stimulus could yield broad-based USD rally.
EUR/USD trades flat, marking a weak follow-through to Tuesday's bounce from crucial support, as investors await more clues from the Federal Reserve (Fed) on the timing of potential tapering or gradual reversing of monetary stimulus.
The currency pair is trading largely unchanged on the day near 1.2155 at press time, having defended the 50-day Simple Moving Average (SMA) support and gained 0.28% on Tuesday.
The dollar's descent has stalled with the futures tied to the S&P 500, signaling a renewed risk aversion with a 0.30% drop. The risk appetite improved on Monday, pushing EUR/USD higher as Biden's administration revealed plans to boost coronavirus vaccines' supply and the International Monetary Fund revised the 2021 global economic growth forecast higher.
Fed to maintain status quo
The central bank is set to leave the interest rate unchanged near zero and maintain its bond-buying plan at around $120 billion per month. However, Fed's chairman Jerome Powell's comments on potential changes in the central bank's bond-buying program could inject volatility into the markets.
According to FXStreet's Yohay Elam, any hint of the Fed considering an early scaling back of stimulus to curb speculative bubbles in the financial markets will likely send stocks lower, drawing haven demand for the greenback.
Several Fed members have recently suggested that the taper could begin as early as late 2021. Similar comments by Powell could push EUR/SD below 1.21, as noted by BK Asset Management's Kathy Lien.
|Today last price||1.2155|
|Today Daily Change||-0.0012|
|Today Daily Change %||-0.10|
|Today daily open||1.2167|
|Previous Daily High||1.2176|
|Previous Daily Low||1.2108|
|Previous Weekly High||1.219|
|Previous Weekly Low||1.2054|
|Previous Monthly High||1.231|
|Previous Monthly Low||1.1924|
|Daily Fibonacci 38.2%||1.215|
|Daily Fibonacci 61.8%||1.2134|
|Daily Pivot Point S1||1.2125|
|Daily Pivot Point S2||1.2082|
|Daily Pivot Point S3||1.2057|
|Daily Pivot Point R1||1.2193|
|Daily Pivot Point R2||1.2219|
|Daily Pivot Point R3||1.2261|
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