Well, yesterday's Fed decision on the rate and comments of the chairman practically did not change anything in the technical picture of the main FX pair EUR / USD. Trading is still concentrated around the balance level $1.23, the pair alternately tests this level from above, then from below. Thus, our expectations that the consolidation of the pair will end with the release of the main news event of the week - are not justified yet. Of course, in the medium and long term, the chances for the euro to gain in the 1.25 area have grown, but technically this has not yet affected the chart.
An interesting picture is emerging, the weakness of USD dollar (which only intensified after yesterday's news) should push euro up, especially with the prospect of canceling QE towards the end of this year. However, the latest data coming out of the Eurozone does not inspire optimism in the markets. Weak data on the ZEW indices received at the beginning of the week, and today the negative PMI of the German manufacturing sector (58.4 against 60.6 a month earlier) and the services sector (54.2 versus 55.3 in February), and in general for the EU 56 , 6 against 58.6 and 55.5 against 56.2 respectively. These leading indicators signal that the European economy is not all so good. German business climate index IFO showed a decline but not so strong (115.4 to 114.7).
Technically, the situation has not changed on the chart for four weeks. This is one of the rare situations in FOREX market with a protracted consolidation, when trading in the channel can be a very profitable strategy. However, the breakout can occur at any time and in any direction, and the outbreak can be quite powerful. Therefore, our recommendations - remain out the market.
Our recommendations - remain out of the market!