© Reuters. The Euro retains its gains yesterday, in expectation of the Fed
Investing.com – The EUR/USD pair manages to keep the essence of the gains from yesterday evening of the end of the european session, in anticipation of the major event of the day, the Minutes of the Fed which will be published this evening at 20h.
Recall that the Euro-Dollar has significantly benefited about dovish tone of the boss of the Fed Jerome Powell yesterday evening, which led the market to revise downward its expectations of rate increases to 2019.
New statements on possible tariffs on US vehicles in europe have then weighed on the EUR/USD pair on Thursday, before the news out of the US disappointing not allow her to score a new peak daily on 1.14, a threshold that the Euro is still close in the late afternoon.
Focus on the Minutes from the Fed tonight at 20h
This evening, investors focus their attention on the publication of the Minutes of the Fed, which lends particular importance, given the surprises dovish Powell yesterday.
Investors will seek in effect signs to confirm or refute a possible turning dovish tone from the Fed.
We will seek to ascertain more particularly whether other members of the Fed are of the same opinion that Powell in regards to the level to be considered as “neutral” to the rate.
It should also be remembered that the Minutes of the Fed does not actually represent the accurate transcript of the discussions of the FOMC, which means that if the Fed really wants to temper the expectations of the market in terms of rates, the Minutes should have been drafted in this sense and to support the statements of Powell last night.
Thresholds to monitor in the short term on EUR/USD
From a graphical point of view, the rise of the day has clearly been blocked by the psychological resistance of 1.14, which will therefore be the first hurdle to be monitored in the event of a surge in bullish of the EUR/USD in the face of the Minutes of the Fed, before 1.1420-25, 1.1450, 1.1475 and 1.15.
For the reduction, the support of 1.1350, which is also the retracement Fibonacci 38.2% of the wave of rise of the Euro, which started yesterday evening, and that has stopped the attempt of a decrease in the day, will be the first important support, before the psychological threshold of 1.13, then the lowest of this week to 1.1265.