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EUR/USD Holds Around $1.2000 After FOMC Fall

EUR
MNI (London)
  • More hawkish than expected FOMC provided USD with an added boost which allowed EUR/USD to break below support at $1.2093 to a NY low of $1.1995.
  • FOMC Dots imply two 25bps hikes by end 2023, whilst talking about talking about tapering. Fed Powell suggested conditions for hikes will likely be met soon than later. US employment remains key for outlook.
  • Asia kept the downside pressure on, eased rate to an extended low of $1.1984 though traders did report decent demand was met from around the $1.1990 level, some suggesting this may be linked to option interest(E1.9bln of expiries noted between $1.1985-1.2005 for today's NY cut), before rate managed to edge its way back to $1.2005 but recovery efforts were noticeably muted.
  • Base of the 1.0% 10-dma currently comes through at $1.2000, not support in itself but rate tends not to like to be outside this parameter for long.
  • Support $1.1985/84, $1.1975, break to open a deeper move toward $1.1943(Apr19 low). Resistance $1.2052, $1.2060/70 ahead of $1.2093.
  • EZ Final CPI 0900GMT
  • ECB Villeroy speaks at 0700GMT, ECB Lane 1230GMT, ECB Elderson 1400GMT.
  • US Weekly Jobless Claims, Phila Fed 1230GMT.
  • MNI Techs: EURUSD fell sharply yesterday on the back of broad post-Fed USD strength, confirming a bearish cycle. The recent breach of the 50-day EMA and 1.2104, Jun 4 low highlights a bearish theme and yesterday's sell-off also confirmed a recent bear flag formation following the consolidation earlier this week. The pair is testing a Fibonacci retracement at 1.1985, a break would open 1.1943, Apr 19 low. Initial resistance is at 1.2147, Jun 15 high.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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