Daily Resistance In View For EUR/USD
Shain Vernier • 2 min read
It is shaping up to be a tough day on the forex for the Greenback. Losses versus the euro and pound sterling have highlighted the action as currency players attempt to price in Wednesday’s FOMC Minutes and testimony from Jerome Powell. Subsequently, the EUR/USD extended post-FOMC Minutes gains earlier in the session.
In total, it is fair to say that Jerome Powell’s testimony has been consistent with current FED themes. Growing uncertainty and accommodative policy are the primary talking points, with very little in terms of surprises. Perhaps the only real difference-maker from Powell was Wednesday’s comments on Libra. Other than that, it has been more of the same from the FED Chair, with sentiment turning bullish for the EUR/USD.
On Wall Street, record highs are the order of the day as investors go long in hopes that a dovish FED will support economic growth. The DJIA is holding firm above 27,000 for the first time in history. Not to be outdone, the S&P 500 has posted all-time highs above 3000. These are epic valuations and may be only the beginning if the FED goes all in on quantitative easing over the intermediate-term.
Topside Resistance In View For The EUR/USD
Amid the charged news cycle of the past two sessions, the EUR/USD has broken out of an exceedingly bearish trend. Rates are back above 1.1250 and may challenge 1.1300 by the weekend.
Here are the resistance levels to watch in the EUR/USD for the near future:
- Resistance(1): Bollinger MP, 1.1290
- Resistance(2): Daily SMA, 1.1296
Bottom Line: As of this writing (12:40 PM EST), the EUR/USD is beginning to fade. However, if this pair finishes the week strong, a short from daily resistance may set up by Friday’s closing bell.
Until elected, I will have sell orders in the queue from 1.1294. With an initial stop at 1.1326, this trade produces 32 pips on a standard 1:1 risk vs reward ratio.