(MENAFN- Daily Forex) Bearish view
Set a sell-stop at 1.0400 and a take-profit at 1.0300. Add a stop-loss at 1.0535.
Bullish view
Buy the EUR/USD pair and set a take-profit at 1.0535. Add a stop-loss at 1.0350.
The EUR/USD
exchange rate drifted downwards after the US published mixed consumer confidence, housing, and durable goods orders data. The pair retreated to 1.0430, down from this week's high of 1.0535 as the focus shifts to the upcoming
federal Reserve and European Central
bank (ECB) decisions.
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Forex Brokers1 Get Started 74% of retail CFD accounts lose money Federal Reserve decision ahead
The EUR/USD pair retreated after the Conference Board reported that consumer confidence moved downwards in January. It dropped from 109.5 in December to 104.1 in January, missing the estimated 105.7.
Another report showed that durable goods orders dropped by 2.2% in December after falling by another 0.2%. Core durable goods orders rose by 0.3%, also lower than the expected 0.4%.
These numbers indicate that the American economy is slowing. They will likely play a small role in the Fed's conclusion of its two-day monetary policy meeting later on Wednesday.
Economists expect the bank to maintain rates unchanged at 4.50%, as guided in the last meeting. In it, officials pointed to two more cuts this year, meaning that rates will end at 4.0%. A key statement to watch will be on the bank's plans on quantitative tightening, a program in which it is reducing its bond holdings.
The other key catalyst for the EUR/USD pair will be the upcoming European Central Bank (ECB) interest rate decision. Economists expect the bank to deliver the fifth consecutive interest rate cut as it engineers a soft landing for the European economy/USD technical analysis
The EUR/USD pair peaked at 1.0535 on Monday as the US dollar index retreat continued. It then formed an evening star candlestick pattern, a popular bearish reversal sign, which explains why it has pulled back to 1.0425.
The exchange rate has moved below the 50-day moving average and the key resistance level at 1.0535, a notable point that coincided with the highest swing on December 17. It is also hovering at the Woodie pivot point.
Therefore, the pair will likely experience higher volatility than usual after the Fed and ECB interest rate decisions. More downsides may push it to the psychological point at 1.0300, while a move above this week's high of 1.0500 will point to more upsides, potentially to the resistance level at 1.0600.
EURUSD Chart by TradingView
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