EUR/USD - All eyes on FOMC meeting minutes!

OANDA:EURUSD   Euro / U.S. Dollar
Today’s main focus on the economic calendar is the FOMC statement by Fed Chairman Powell. Reporters will surely pressure him for details as to the possibility of a rate cut later this year. Earlier this month Powell stated that the economy is growing but due to trade tensions the Central bank will “act as appropriate to sustain expansion, and while he never used the words “rate cut,” investors rushed to price-in easing.

At the time, 11 out of 17 policymakers felt that additional rate hikes were not necessary in 2019. In May, Fed Chairman Powell stated that policy stance is appropriate for the time being and that the CB did not see a strong case for moving in either direction. The shift in opinion is due to concerns for low inflation , household spending and business investment.

How the USD reacts will depend on the sentiment of Powell’s statement.

If the statement is HAWKISHand positive, with strong emphasis that the economy is growing, unemployment is low, inflation is stable and there are no immediate plans to change interest rates will be a good recovery for the USD and may bring EUR/USD to the area of 1.10 which has proven as a strong support level in the past.

If on the other hand Powell is DOVISHand does hint at a possible rate cut we could see the Dollar fall sharply and EUR/USD could break above the 9EMA in the area of 1.1350.

Technical Analysis:

Looking at the picture from the technical side, on a 1DTF – we see that the overall trend is bearish . Switching to a 4HTF, we see that the pair is trying to break the 9EMA up and Williams %R has left the oversold zone, MACD lines have intersected as well but we dont see a reversal on the Parabolic SAR . All things considered we do not have a clear signal at this time.

Currently in our opinion the short term future of EUR/USD depends mainly on the FOMC meeting.
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