NVTForex

EUR/USD: FED to rock the boat this week

EUR/USD Current Price: 1.1252

The American dollar recovered a good portion of the ground lost after the release of poor Nonfarm Payrolls data this past week, and in spite of chances of a FED rate hike remaining low. The US FOMC will have its economic policy meeting this week, and the decision will be unveiled next Wednesday, when the Central Bank is largely expected to remain on hold. Greenback's gains  by the end of the week,  were underpinned by a raid of risk-aversion, spurred by worse-than-expected Chinese data, which revived fears over a global economic slowdown.

Fueling the dollar at the end of the week was the US University of Michigan consumer sentiment index that come in at 94.3 in June, slightly below the 94.7 previous, but above the 94.0 consensus. The macroeconomic calendar will be extremely light this Monday in Europe and the US, although the week will open with plenty of data coming from China, which will likely define market's sentiment until the FED. 

From a technical point of view, the EUR/USD pair's latest decline could have also been fueled by profit taking ahead of the major events  including Central Banks and the Brexit referendum, but whatever the reason behind the retracement a bearish continuation is not yet confirmed, given that in the daily chart, the price is above the 20 SMA and 100 SMAs, which converge around 1.1220/30, the immediate support, whilst the technical indicators have turned lower, but are unable to confirm a downward breakout. In the 4 hours chart,  however, the pair presents a clearer bearish momentum with indicators heading south near oversold levels, and the 20 SMA turning south around 1.1340. 

Support levels: 1.1225 1.1190 1.1160

Resistance levels: 1.1290 1.1340 1.1385 

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