Fundamental analytics

The EUR / USD pair could not hold above the 1.19 level


The EUR / USD pair is trading in a narrow range on Thursday and is holding close to Wednesday's intraday lows.


The FOMC minutes published yesterday had practically no effect on the trading. The Fed sees no reason to change monetary policy so far. The economic situation has improved, but the main indicators are still far from the forecast values. Economic prospects remain uncertain due to the pandemic. Therefore, the Fed intends to continue the implementation of the stimulating policy for a long time.


The Federal Reserve has given the market another signal that it is too early to discuss the issue of changing the monetary policy. The regulator intends to stick to the plan and does not intend to change the policy until at least the end of 2023.


This is a negative signal for the dollar, as many investors previously hoped that the FOMC minutes would signal a possible change in monetary policy in the future. The dollar index sank by 0.1% since the beginning of the day. The yield on long-term US bonds maintains a downward movement vector, which may increase the pressure on the American currency.

Despite the weakness of the dollar, the EUR / USD pair is still vulnerable. The difficult epidemiological situation and low rates of vaccination of the population in the EU limit the demand for the European currency. Therefore, the euro may lose a significant part of the achieved position in relation to the main competitors. Today the EUR / GBP pair slipped 0.2%, indicating potential weakness in the European currency. Today we can see the continuation of the downward trend for the EUR / USD pair.


In the economic calendar, three key events of the day can be distinguished: the ECB's comments on monetary policy, the publication of weekly statistics on the US labor market and the speech of Fed Chairman Jerome Powell at an event organized by the IMF. Most likely, the data on the labor market will have the strongest impact on trading.


On the chart, the price could not keep above the level of 1.1900. Today we are waiting for the development of a downward wave in the direction of the level 1.1830. This scenario remains relevant while the price is below the level of 1.1880.


· Resistance levels: 1.1880, 1.1930, 1.1990.


· Support levels: 1.1865, 1.1830, 1.1800.


The main scenario is a decline to 1.1830.


An alternative scenario is a breakdown of the resistance at 1.1880 and an increase to 1.1930.


The current fundamental background is neutral. We consider shorts from the level of 1.1880.


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