US Dollar Collapses to 2-Month Low

April 26, 2021

Federal Stance on Tapering May Affect the Trend

away Bog& Giulvezan

The US Dollar lost ground against many of its major counterparts on Monday, taking a nose-honkytonk and retreating to well-nig 2-calendar month lows. The EUR/USD is currently trading fitting shy of 1.2100, after a perfect bounce at 1.1700 support, which occurred just about a month ago.

Federal Reserve System's meeting that takes place this Wednesday will be the intense event of the week but most analysts expect Fed Chair Hieronymus Powell to reject the tapering of monetary system easing, a fact that would set out pressure on the bank bill, taking EUR/USD even higher.

On the early pull of the pond, the Euro was boosted Friday by positive information happening European services and manufacturing sectors, piece today's data is expected to show improvement in the German business conditions, which would bolster overall sentiment and possibly push the axis's single up-to-dateness higher against the greenback.

Key Events for the Week Ahead

Tuesday, April 27 the Conference Board Inc. wish release the U.S. Consumer Trust survey, which is a gauge of financial self-assurance and acts as a guiding indicator of consumer disbursement, which in turn represents a major part of the overall economic activity. The release is regular at 2:00 pm Universal time and the prefigure is 112.0, while the previous indication was 109.7

Wednesday, April 28 at 6:00 pm GMT, the Fed will release the FOMC Statement, which contains the outcome of the Federal Funds Rate votes and incomplete an hour later, Fed Chair Powell wish hold the common news conference. The rate is not expected to change and the Chairman is non expected to have a hawkish stance regarding tapering plus purchases, thus the entire event may go mostly unnoticed. However, surprises are always a possibility, so it's better to treat the event with caution.

The U.S. Advancement GDP wish personify released Thursday, April 29 at 12:30 phase modulation GMT, and since this is the early version of the three (Advance, Preliminary and Final), it tends to have the biggest shock. The forecast is a change of 6.5% (previous 4.3%), which would show enlarged economic activity for the U.S., potentially boosting the greenback.

Chart Analysis – EUR/USD

Later on the bounce at 1.1700 support, the pair has been traveling uphill near in a straight line and has recently moved in a higher place a significant bearish trend line drawn from the January 6^th high.

The MACD is still display optimistic impulse (lines moving up and well spread apart) and the pair is seance above the 50 days Moving Average. These factors combined, show purchasing pressure and increase the possibility of a move in 1.2200 – 1.2220 resistivity.

On the different hand, the Relative Intensity Index is moving closer to overbought, which may wreak a persona in potential pullbacks. The levels to watch are 1.2100 as immediate resistance, followed away 1.2200, while connected the downside we have to maintain an optic on 1.2000 – 1.1970 Eastern Samoa potential support.