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Euro shies away from $1.38

The EUR/USD has pulled back from the $1.38 mark as traders have taken their profits from two days of gains.

The EUR/USD is trading at $1.3787, down slightly on the day, as traders look ahead to the Federal Reserve minutes at 7pm (London time) tonight.

The update from the US central bank arrives a few days after the non-farm payroll report came in slightly lower than expected. The jobs report was good but not great, with 192,000 new jobs added whilst the market expected 200,000. This leaves us in a grey area when wondering what the Fed will do next. I am leaning towards Janet Yellen’s view of not rushing to taper the stimulus package in the near term.

Tensions in Ukraine have cooled in the last day, but the situation is far from over. As more regions begin to voice pro-Russian allegiance, we could see the EUR/USD move towards the $1.37 mark that Alastair McCaig pointed out as a key support level.

If the Fed minutes maintain their wait and see stance, we could break through the $1.38 mark. However, the statement would have to be very dovish in order to push the euro towards the $1.39 level.

Spot FX EUR/USd chart

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