The FOMC’s minutes from its previous meeting shocked many in the market as it hinted higher rates are here to stay despite the weakness seen in recent US numbers. This is a reminder to the market that the Fed’s primary concern is inflation. Unless the economy were at the brink of a recession weak data from some sectors will not prompt it to cut rates if prices remain high. Aheqad we once again have Flash PMI numbers from Europe and the US to provide further impetus for price action.
Resistance
- 1.08951 – Swing High
- 1.08697 – Intraday Consolidation Resistance
- 1.08360 – Previous Daily Range Play Floor
Support
- 1.07828 – 38.2 Fibonacci Retracement
- 1.07556 – Intraday Consolidation Resistance
- 1.07248 – Daily Low May 09
EURUSD closed well below its previous consolidation floor just marginally above the days low. This paves the way for a pullback to the 38.2 Fibonacci retracement level, right where we find the daily moving averages with a new golden cross. Intraday we have 4H stochastic looking to push oversold though with the breakout and bearish close this is to natural and only signals a bearish market. Our immediate bias going forward is to look for prices to ease towards the 38.2 Fib retracement level. We could use an hourly engulfing candle and new lows for the day as an excuse to jump short or long wicks if coming from 1.08360.
