The main event of the day is a release of FOMC minutes at 7:00 pm BST. Fed Chair Powell said during the post-meeting press conference that QE tapering will be announced well in advance. While neither US central banker hinted at taper discussions having started already, investors will still look for any hints on timing. Will the release provide a boost for the US dollar? Watch these 3 USD charts this evening!
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Let’s start today’s analysis with the EURUSD chart. Looking at the daily time frame, we can see that the pair has been trading in an upward move recently. Buyers managed to break above the downward sloping trendline ( red line on the chart below) at the beginning of May. Retest of the aforementioned trendline occurred later on and the pair resumed upward move. However, buyers lost momentum today and the upward move was halted at the resistance area at 1.2240. Should the bigger downward correction occur, the nearest support to watch lies at 1.2175. In case of breaking below it, the lower limit of upward channel (marked with blue colour) is the next important support to watch.
EURUSD D1 interval. Source: xStation5
GBPUSD
GBPUSD has also been trading in an upward move recently. However, one can see that the upward move has reached a resistance area - marked with high from late-February and the upper limit of the upward channel - and a downward correction was launched. If buyers do not manage to break above the 1.4240handle , the downward correction may deepen. In such a scenario, the nearest support to watch lies at 1.4110, where the previous price reactions can be found. In case buyers fail to stop the falls there as well, a move towards key mid-term support at 1.40 may be on the cards.
GBPUSD H4 interval. Source: xStation5
USDIDX
The US dollar index (USDIDX) has been trading in a downward trend for a long time. Recent attempt to recover has failed and the index trades near 2021 lows. The area marked with green colour on the chart below (89.4 area) is a key long-term support. Should bulls manage to halt declines there, a potential double bottom formation may appear on the chart. On the other hand, if we see a break below it, stronger downward impulse may be on the cards. The 88.2 level, marked with 2018 lows and the 127.2% Fibonacci retracement of the recent upward correccion, is the next potential target for market bears.
USDIDX D1 interval. Source: xStation5
