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EUR/USD Clings to $1.1900. Focus on FOMC.

EUR
MNI (London)
  • EUR/USD reversed sharply away from its Tuesday recovery level of $1.1952 through the NY session, the rate touching a low of $1.1883 before recovering through the 1600GMT fix to $1.1910 ahead of the close.
  • It was noted yesterday that the $1.1900 levels was holding decent sized EUR put option expiries at the NY cut (1400GMT). Rate had dipped to $1.1897 ahead of the cut but edged back above before the later move to $1.1883. The $1.1900 has E1.65bln of EUR puts rolling off at today's cut(E1.5bln Mar18) which could draw support ahead.
  • Rate consolidated between $1.1900-06 in early Asia, dipped to $1.1893 in early Tokyo before it settled back around $1.1900 through the rest of the session.
  • Support expected around $1.1900, especially into 1400GMT, break exposes $1.1892/83 ahead of $1.1872/69 and the 200-dma at $1.1848.
  • Resistance $1.1925/35 ahead of $1.1952.
  • EZ CPI 1000GMT ahead of US Housing Starts, Building Permits at 1230GMT.
  • ECB Elderson(hawk) speaks at 1500GMT
  • Main focus on US FOMC at 1800GMT. No change in rates expected, more interest in Fed Powell press conference 1830GMT.
  • Market has adjusted positions ahead of this event in case the FOMC hints hawkish. Comment on recent yield rise to be watched as well as latest set of economic projections, Dot plot, especially for a potential hike in 2023. MNI expect Powell to resist pressure to hone QE guidance.
  • MNI Techs: EURUSD maintains this week's slightly softer tone and the pair remains below resistance at 1.1990, Mar 11 high. Last week's gains resulted in a break of 1.1952, Feb 25 high and this suggests scope for an extension higher near-term. A breach of 1.1990 would open the 20-day EMA at 1.1999 and 1.2069, the Mar 4 high. From a broader trend perspective, a downtrend remains intact. A break of 1.1836, Mar 9 low, would resume this trend.
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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