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$1.1988/90 Next Upside Hurdle

EUR
MNI (London)
  • A less dovish, than had been prepared for, FOMC, prompted a strong USD sell off which spiked EUR/USD to $1.1985 ahead of Wednesday's close.
  • Market had adjusted positions ahead of the announcement, looking for any move in the dot plot that would signal a potential rate hike in 2023. The Fed showed that it wants to keep policies in place that will push up employment as well as inflation.
  • Failure to push on through resistance at $1.1988/90 prompted some paring back of longs, which eased rate back to $1.1955 before demand emerged, edging rate back to $1.1970 ahead of Europe.
  • Resistance remains in place from $1.1988, with traders noting that the $1.1995/1.2005 area holds E1.7bln of EUR put option expiries for today's NY cut (1400GMT) which should add to sell interest here. $1.2007 (61.8% $1.2113-1.1836) close behind, a break to expose $1.2040/50 ahead of $1.2067(see MNI Techs below). Support $1.1955/50(while holds above seen keeping outlook buoyant). Break here to expose $1.1930/20 ahead of $1.1900(level holds E1.6bln of EUR puts expiring at 1400GMT).
  • ECB Lagarde speaks at 0800GMT and 1100GMT. ECB McCaul 0830GMT, Guindos 1310GMT, Schnabel 1800GMT. EU Trade Data at 1000GMT.
  • US Weekly Jobless Claims and Phila Fed at 1230GMT
  • MNI Techs: EURUSD traded higher yesterday as a dovish Fed underpinned a modest recovery. In price pattern terms, yesterday is a bullish engulfing reversal. If correct, it suggests the recent pullback between Mar 12 - 16 has been a correction and that a bullish theme has returned. The pair still needs to clear resistance at 1.1990, Mar 11 high to strengthen the argument for bulls. This would open 1.2067, Mar 4 high. Support is at 1.1883, Mar 16 low.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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