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EUR / USD is heading to the level of 1.10

Aug 1 2019, 02:42 PM (BDT) |

The FOMC decision and comments by Fed Chairman Jerome Powell put strong pressure on the EUR / USD pair, which for the first time since May 2017 fell below 1.11. The regulator decided to reduce the interest rate by 25 bp, which, as a rule, leads to a weakening of the national currency.

In this case, the unusual reaction of the market is understandable. Firstly, it should be noted that such a decision of the regulator was widely expected, therefore, in many respects it was already taken into account in the current price. Secondly, many investors counted on a stronger easing of monetary policy. The regulator disappointed these investors because it announced a very cautious approach to considering the issue of further rate cuts. The US economy remains strong enough, so at the moment there is no need to implement larger-scale stimulus measures.

Today, traders will continue to play with yesterday's FOMC decision. Also, a moderate impact on trading can have data on manufacturing sector PMI in the EU and the USA.

The general fundamental background is still negative.

From the level of 1.1155, the currency pair turned down and, pushing support at 1.1100, continued to move as part of the global bearish trend. The next most likely target for the decline is the level of 1.1000.

Resistance levels: 1.1075, 1.1100, 1.1155.

Support levels: 1.1000, 1.0985, 1.0900.

The main scenario is a correction to 1.1075 and the resumption of the downward movement.

An alternative scenario is a decline to 1.1000 from current levels.

A negative fundamental background remains on the market, and bearish signals still prevail on the chart. Therefore, we give short-term preference to shorts, which are worth looking at 1.1075.

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