Dating back to January of 2017, the bulls have been in control of the EUR/USD. Buyers have taken the exchange rate from near par to upwards of 1.2550. The concerted rally has benefitted long-term bulls greatly over the last 16 months.
However, the recent pressure on the EUR/USD has many currency experts calling for a corrective cycle. The sell-off of the last two weeks promotes this sentiment. But are we really headed for a major revaluation of both the Euro and USD? The price action surrounding today’s FED meeting may give us a few clues.
EUR/USD Technicals
For the first time since early January, the EUR/USD has penetrated the 1.2000 handle. While this occurrence is not overly significant, it does illustrate the current lack of bullish sentiment in the market.
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No surprises are expected for today’s 2:00 PM EST FED Interest Rate Announcements. If the FOMC decides to throw us a curveball, here are a few downside support levels to watch closely:
- Support(1): 2018 Low, 1.1916
- Support(2): 38% Retracement of Jan. 2017/Feb. 2018 Bull Run, 1.1708 (not pictured)
Overview: Last night’s release of the Eurozone GDP did little to boost the Euro against the Greenback. The number came in on schedule at 2.5% (YoY) but was still down from the previous release of 2.7%. If nothing else, the number was not viewed as being overly positive by the market.
After the compressed trading range of March and most of April, the EUR/USD is on the move. If verbiage from today’s FED release alludes to robust U.S. economic performance and a policy of gradual tightening, the bearish trend will continue.
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