EURUSD: Bulls Aim To Pare Yesterday’s Losses

The EURUSD pair dipped 0.43% to 1.2170 on Wednesday, May 19. Market volatility was heavy throughout the session. The bulls’ attempt to push higher fizzled after the minutes from the Fed’s April monetary policy meeting came out. FX players were a bit surprised that some FOMC members said that in the event of a rapid economic recovery, it might be appropriate at some point to put tapering on the table. In the upshot, the single currency slipped to 1.2160, halting at the 67-degree angle.

Bank Note, Euro, Bills, Paper Money

Image Source: Pixabay

Today’s macro agenda (GMT+3)

  • 11:00 Eurozone: trade balance (March)
  • 13:00 UK: CBI industrial trend orders (May)
  • 15:30 Canada: new housing price index (April); US: Philly manufacturing index, initial weekly jobless claims
  • 17:00 US: CB leading index (April)

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Current outlook

At the time of writing, the euro fetched 1.2196. Amid rising euro crosses, buyers are attempting to win back yesterday's losses. At this stage, it’s hard to say whether they will succeed or not, since yesterday the trendline (3) failed to hold and the price action slipped below the balance line (55-day SMA). Today these lines have turned into resistance levels.

Major currencies have been trading in positive territory. Today’s top-performing currencies are the aussie dollar (+0.35%) and kiwi dollar (+0.33%). The euro is up 0.16% compared to Wednesday's close.

The news flow for the euro and the dollar is subdued today, so all eyes will be on 10Y treasuries. The yield currently stands at 1.668%, widening after the FOMC minutes were released.

The price pattern on the hourly TF looks ambiguous. If, within 3-5 hours, 10Y yield does not rise above 1.68%, it will sink to 1.62%, putting pressure on the greenback. This would be the time for the bulls to buy into the euro.

The resistance level is 1.2205 for EURUSD. If, by some stretch of the imagination, the bulls manage to gain a foothold above that level, a false breakout of the trendline will be seen and in all likelihood, the gains will pick up to 1.2241 (1). Conversely, a sharp pullback from 1.22 would heighten the risk of retracing to the 1.2160 low.

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Disclaimer: Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial ...

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