By Gabriel Ojimadu, Alpari
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On Wednesday the 11th of April, trading on the EURUSD pair closed slightly up. The pair spent most of its time hovering around the 135th degree at 1.2380. Markets swung in all directions as they braced themselves for a potential strike in Syria by the US, France, or Germany. It’s been 48 hours, but Trump has yet to make the decision to strike. The euro slid against the dollar from 1.2396 to 1.2347 after the FOMC minutes were published.
The minutes of the FOMC’s March meeting show that many committee members expect the economic situation in the country to continue to improve and for inflation to rise. All 9 committee members voted in favour of the 25-base-point rate hike. This was the 6th rate hike since December 2015. Senior members of the Fed expect a further two rate hikes this year. The regulator also expressed concerns over the influence the White House’s trade and fiscal policies are having on markets.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
My predictions for yesterday came off in full. The 135th degree held back the bulls’ advancement. After the FOMC minutes were published, the rate met the LB balance line at 1.2347.
Free Reports:
For Thursday, the 1.2338 – 1.2345 range is a strong support. Since most of the euro crosses are trading up and the stochastic oscillator is in the buy zone, I expect prices to recover to 1.2367 in Europe. From here, an upwards breakout of the downwards channel looks unlikely. If the hourly candlestick closes above the channel, the prospect of a drop will disappear.
At 14:30 (GMT+3), the ECB will release a report on its latest meeting on monetary policy. This could cause the euro to decline up until trading opens in the US. For now, I can’t see quotes falling any lower than the 67th degree at 1.2313. If the pair returns to this level ahead of time, i.e. before 15:00 (GMT+3), I’ll revise my target.