© Reuters. The dollar rebounds sharply and cancel out the losses post-Fed
After having gained about 100 pips yesterday evening in the face of the Fed meeting, the EUR/USD pair has a substantially fixed today, and at the end cancel all of the gains last night as the end of the european session approach.
The Dollar, which had been heavily mauled in the face of the ads dovish tone from the Fed yesterday evening, posted a rebound amazing during the day. Thus, the Dollar Index is now displayed above the levels prior to the Fed meeting.
A few factors help explain (in part) the rebound in the Dollar
Some positive information about trade negotiations with China could help strengthen the Dollar, as the statistics above expectations published at the beginning of the afternoon, but it must be confessed that the magnitude of the rebound posted by the greenback today is somewhat surprising, given the surprises dovish announced by the Fed yesterday evening.
After all, as pointed out by Powell yesterday, the expectations communicated by the Fed in terms of rate increases do not constitute a road map etched into the marble.
This may change, and if the economic indicators continue to show solid, and that this tendency is reinforced by a near-agreement with China, the next update of the chart Dot Plot could very well do the new show the possibility of one (or several ?) rate increases this year.
And it is perhaps this reflection that prompted today traders to bet on the Dollar to the point to cancel the fall last night.
Where is the EUR/USD?
In regards to EUR/USD, it should also be noted that the correlation with the GBP/USD has spent the day falling in the face of the fog more and more thick, surrounding the discussions about Brexit, is not foreign to the fall of the Euro, although this is the rise of the Dollar, which has actually led the dance.
From a graphical point of view, EUR/USD comes in contact with the old resistance of 1.1360, near the moving average 100 hours to 1.1357, and the pair could find support in this area, at least temporarily. Below this level, the next supports are placed at 1.1335, 1.1325 and 1.13.
Has the upside, only a return back above 1.14 would again consider a phase of rise with the potential to move EUR/USD on a test of the psychological threshold key of 1.15.