The pair ended the previous session flat at $1.1078 and is trending lower in early trade on Wednesday, as investors digest the latest in trade headlines whilst looking ahead to the release of the FOMC minutes later today and ECB minutes to be released tomorrow.
Dollar traders will now look ahead to the release of the FOMC minutes. Traders will be keen to see the deliberations from the meeting 30th October where the Fed cut interest rates for a third and final time in this cycle. The minutes come following two testimonies by Fed Chair Powell in Congress, which means that they could be considered slightly old hat and are unlikely to create any major moves in the market.
The release of the OECD economic outlook is expected to confirm lacklustre growth in the eurozone. The latest OECD economic projections report back in September pointed to a mere 1.1% growth in 2020 and 1% growth in 2021. The report could reinforce slowdown fears.
Looking ahead minutes from the ECB meeting will be eyed closely amid growing unease within the central bank over unlimited quantitative easing. Should the discussions show an increasing resistance to the ongoing easing programme, the euro could receive a boost. Then it will be up to Christine Lagarde to pull governments on-board for a boost in fiscal stimulus.
Levels to watch:
The pair has failed to hold onto to the uptrend which started early October. In failing, the pair has broken through 100 & 50 sma on 4 hr chart, a bearish sign although the 200 sma remains intact.
Immediate support can be seen at $1.1055, prior to $1.1045 and $1.1015. On the upside resistance is seen at $1.1090, $1.1110 before $1.1130.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.