EUR/USD: Will We See 1.1100 This Week?
With it being the most liquid currency pair there is, it comes as no surprise to us that EUR/USD likes to take its time playing out, but sure enough, we do get there.
Previously, we were mentioning a rejection off our 1.1200 level which we eventually got. Smaller timeframes were showing us a rejection off our downward sloping trend-line and a head and shoulders pattern. At the time of writing, price is trading at 1.1167 and is showing us some half decent support at 1.1150. I still anticipate further downside on the pair with our eventual target being 1.1000 but 1.1100 as our first target, if you hold down until these levels give yourself a pat on the back, that has shown great patience.
Tonight we have the FOMC meeting minutes, which we give us further clarification on what was disgusted at the previous meeting and a clearer indication of the language used on future policy moves. FED chair Powell has stated previously that he is happy with the wait and see approach, but Mr market has taken this as a negative with the probability of a cut before year-end at near enough 100%.
I personally feel the market has taken this “wait and see approach” too far as Powell has not even sniffed at a cut and data-wise it does not suggest this. Inflation is close to their 2% target currently and the labour market is extremely tight. These are two key aspects of a central Bank mandate, and with both near enough spot on why would the Central Bank look to cut?
For price to really sustain any upside we need to break and close above the downward sloping trend-line on the daily chart which is currently just above 1.12.