EUR/USD in narrow range ahead of FOMC minutes

The pair is presently testing and holding above the 200-hour moving average metric, since failing to make any inroads through the 1.38 level over the past week.

The FOMC statement due out at 7pm (London time) will surely now act as a catalyst for the future direction of EUR/USD.

It’s not a question of whether the FOMC should scale back its current QE programme or not, but rather but if it will happen. And, while hawkish speculation has increased in the past few weeks, the prospect of a change in monetary policy at this juncture seems quite unlikely.

Meanwhile, it’s all looking very rosy for the German economy. An upbeat ZEW number yesterday and an optimistic 20-year high for the IFO business climate today both serve to put an upside spin on Q1 growth expectations for the eurozone’s economic powerhouse.

The trend is most certainly and technically in favour of euro upside bias.

A push through the trendline resistance from the 11 December highs puts the pair on a course to retest the 1.3833 levels. Conversely, any declines below the 1.3730 level could see a return to 1.3620/30.

Spot FX EUR/USD chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.