Since May 2014, EUR/USD remains in the global downtrend. At the beginning of the European session on Wednesday, EUR/USD is trading near the 1.1200 mark, below resistance levels 1.1230 (ЕМА200 on the 4-hour chart), 1.1243 (ЕМА200 on the 1-hour chart).
The focus of traders on Wednesday is the publication (at 18:00 GMT) of the Fed decision on rates. It is expected that the rate will remain at the same level of 2.5%. Nevertheless, many financial market participants are waiting for signals from the Fed about the possibility of lowering the rate.
At 18:30 (GMT), the Fed’s press conference will begin. Market participants will analyze the statements of the Fed Chairman to understand how likely a decrease in the rate is in July. The soft tone of the statement and press conference or direct signals aimed at easing monetary policy will cause an increase in stock indices and a fall in the dollar, including against the euro.
The soft monetary policy of the central bank usually contributes to the cheapening of the national currency.
In the current situation, technical analysis fades into the background. Probably the most cautious investors would prefer to stay out of the market during this time period.
Breakdown of the local support level of 1.1180 will accelerate the EUR/USD decline towards annual lows near the support level of 1.1125.
If the Fed announces a rate cut, at least later this year, the dollar will decline and the EUR/USD pair will go towards resistance levels of 1.1285 (Fibonacci level 23.6% of the correction to a fall from the level of 1.3900, which began in May 2014), 1.13050 (EMA144 on the daily chart). Below these levels, negative dynamics prevail; short positions still look better.
Support Levels: 1.1180, 1.1125, 1.1100, 1.1000
Resistance Levels: 1.1230, 1.1243, 1.1285, 1.1305, 1.1355
Trading Recommendations
Sell Stop 1.1170. Stop Loss 1.1250. Take-Profit 1.1125, 1.1100, 1.1000
Buy Stop 1.1250. Stop Loss 1.1170. Take-Profit 1.1285, 1.1305, 1.1355
EUR/USD: Current Dynamics
