With an FOMC rate decision and economic projects due Wednesday, traders will be closely looking on rate differential issues. Already the ECB has started its own easing cycle with last weaks 25bps cut though none committal on when the next move will be. On the other side speculations call for the Fed to reduce the number of rate cuts for 2024 and is likely to keep things steady in today’s meeting. Well before the FOMC meeting we have US CPI consensus forecast at 3.4% year-on-year with any show of strength likely to be seen as an excuse of lowering US easing expectations given the strong NFP read last Friday.
Resistance
- 1.07996 – Friday Low
- 1.07763 – 50D Moving Average
- 1.07493 – Intraday Consolidation High
Support
- 1.07240 – Daily Consolidation Low
- 1.06944 – Intraday Consolidation Low
- 1.06494 – Low for May
EURUSD eased off from the open of European markets generating a new low keeping prospects of a follow through to the broadening pattern bearish reversal. We now have prices under the 50D Moving Average with the breakout from monday’s bearish gap complemented by an oversold stochastic. Risks for us will be to see further declines in EURUSD though it would be best to steer clear of the US FOMC decision later. That said I push above 1.07494 may see a quick covering of the gap from Monday’s open.
