By Gabriel Ojimadu, Alpari
Previous:
On Tuesday the 12th of June, trading on the euro closed down. This drop was brought about by the universal decline of the dollar following comments from Jerome Powell. He said that he plans to hold a press conference at the end of every central bank meeting. This is good news, as when Janet Yellen was chair, she only held press conferences after meetings in which interest rates were hiked. The euro has since dropped to 1.1734.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
Current situation:
We’ve had several false breakouts of the trend line recently. Our pair dropped below the trend line towards the end of the US session yesterday. The drop amounted to 67 degrees.
Free Reports:
Today marks the end of the FOMC’s two-day meeting. Market participants are expecting a key rate hike of 0.25%. There will be a press conference with Chair Jerome Powell to follow. The ECB is meeting on Thursday. Volatility is set to be high during the US session.
I’ve decided not to make a forecast because I’m expecting movements in all directions. Traders expect the ECB to set out a timeframe for ending its bond-buying program, while the Fed is expected to raise interest rates. If we consider that a rate hike has already been factored in by markets, then we’ll most likely revisit the low from the 8th of June (1.1727) before returning to 1.1755. We won’t be able to move very far upwards without a decision from the ECB.