Two Trades To Watch: EUR/USD, Gold - Wednesday, Apr. 7

EUR/USD rebound failed at the 200 dma, service sector PMIs and FOMC minutes in focus. Gold eases back from two week high ahead of FOMC minutes.

FED 9

EUR/USD pauses for breath ahead of services pmi & FOMC minutes 

The EUR/USD hit a two week high in the previous session on news that the EU could reach its vaccine target sooner than initially expected. 

Germany, France, Italy and Spain will have sufficient supplies to vaccinate at least 57% of their total population by the end of June. 

A mild uptick in US bond yields is supporting the US Dollar and capping EUR/USD upside. 

Eurozone services PMI could provide some direction ahead of FOMC minutes. 

Where next for EUR/USD? 

EUR/USD bounced off support at 1.17 last week, with the recovery stalling overnight at the 200 sma on the daily chart. A decisive move above this level at 1.1890 is needed to set the scene for further gains. Further resistance can be seen at 1.1990 the confluence of the 50 sma and horizontal resistance which capped gains several times across March, and then 1.20 the key psychological level. A move above here could negate the bearish bias and see buyers gain momentum. 

On the flip side, failure to break above 1.1890 could see the price slip lower, with moves towards 1.1830 still considered buying opportunities. A move below 1.18 the descending trend line support and horizontal support from April 6 could make the pair more vulnerable to a deeper sell off back towards 1.17 (FXE, UDN). 

Gold looks to FOMC minutes 

After hitting a two week high in the previous session, Gold edged lower during the Asian trade and currently sits at the lower end of its daily traded range. 

An uptick in US treasury yields amid expectations of a fast, strong US economic recovery is hurting demand for the precious metal.  

Doubts remain over the ability of the Fed to retain ultra-low interest rates for a long period of time as the vaccine rollout ramps up and thanks to Biden’s huge infrastructure spending plan 

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