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Consolidates Below $1.2100, Awaits FOMC

EUR
MNI (London)
  • Touched an extended pullback low of $1.2057 in European morning trade Tuesday (off Monday's high of $1.2117) before recovery to $1.2092 in early NY then settled between $1.2070/90 through the balance of the session, though managed to close at $1.2093.
  • Position adjustments ahead of today's FOMC Monetary Policy announcement (1800GMT), no change widely expected, with most attention on Fed Powell press conference at 1830GMT. US Biden addresses a joint session of Congress, expected to detail his 'American Families Plan' , package expected to be in excess of $1.tln and to be bundled into the $2.25tln 'hard infrastructure' proposal.
  • Quiet start in Asia saw rate hug $1.2090 before the Tokyo open, the rate then coming under pressure as USD/JPY picked up fresh demand, which shoved EUR/USD down to $1.2072 into the European open.
  • Support $1.2057, $1.2056(50% $1.1.1994-1.2117) ahead of $1.2041(61.8%) , stronger into $1.2023(76.4%). Resistance $1.2093, $1.2094/03(61.8%-76.4% $1.2117-1.2057) a break here to expose stronger resistance into $1.2013/17(falling trend resistance/Apr26 high) , with Asian traders noting resistance into $1.2120, a break to boost upside potential.
  • Option expiries of note for today's NY cut include $1.2030-50(E1.5bln), $1.2080(E1.1bln), $1.2100-05(E1.4bln), $1.2125-45(E1.7bln-EUR puts)
  • Germany GfK Consumer Confidence 0600GMT, France Cons.Conf. 0645GMT. ECB Rehn speaks at 1100GMT, Centeno 1200GMT, Schnabel 1245GMT, Lagarde 1400GMT.
  • MNI Techs: EURUSD is consolidating. Rally on Apr 23 breached 1.2080, negating a bearish pattern - a gravestone doji on Apr 20. The climb reinstates a bullish outlook. A key short-term hurdle for bulls however remains intact. 1.2113 is a bear channel top drawn off the Jan 6 high. A clear break of this resistance would be bullish and signal scope for an extension towards 1.2184, Feb 26 high. Support to watch is unchanged at at 1.1994, Apr 22 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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