EURUSD Forecast: Euro fight back after FOMC. Technically, false breakdown might lead to further bullish
The EURUSD failed to continue it's bearish momentum yesterday, even the Fed statement was flat, nothing significant. The way I see it, market opinion was that the economy recovery is still in the right track. The Fed also said that it will keep the rates near zero for an extended period which make the Dollar less interesting than major currencies.
Technically, we have false breakdown on both major trendline support on daily chart and the range area on h4 chart as you can see in my daily and h4 charts below, which potentially lead to further bullish momentum. Like I said yesterday, false breakdown from the range area on h4 chart lead to further bullish momentum with 1.4950 1.5060 area as potential bullish target. I prefer a bullish scenario at this phase and focus now is on ECB rate decision and press conference today. With no significant surprise in economic data, it's more likely that the ECB statement will also flat but investors, once again, might see that global recovery is also still in the right track. Unless we have significant negative tone from ECB, the Dollar should keep under pressure. Immediate support at 1.4800. Break below that area should lead us into no trading zone but I still prefer bullish scenario. I think it's better to do nothing for now until the ECB press conference. Patient, my dear fellow traders, is a virtue.
The Sterling was also benefit from Dollar bearish after FOMC yesterday, topped at 1.6596 and closed at 1.6555. Technically on h4 chart below we can see that my triangle has been violated to the upside indicating potential further bullish scenario at least towards 1.6700 area before re-testing 1.7042. Immediate support at 1.6520/00 area. Break below that area should lead us into no trading zone but I prefer bullish scenario at this phase.
On fundamental side, investors focus is now on whether the BoE is going to expand the quantitative easing program. If that happen, Sterling should be under heavy pressure and technical bullishness might fail.
The USDJPY had a bullish momentum yesterday, topped at 91.31 but closed lower at 90.84. On h4 chart below we can see that my minor trendline support (former resistance, yellow) did a good job preventing bearish attack. This fact threat my bearish outlook for sure and the lower line of the bullish channel is now the final resistance to be tested. A movement back inside the bullish channel should be seen as bearish scenario failure and continue the bullish momentum re-testing 92.50 area. Immediate support at 90.30 followed by 89.80 area. I think I will keep stay out for now and wait for further development.
The false breakout from the range area on Tuesday proved to lead further bearish momentum for the USDCHF yesterday, bottomed at 1.0125 and closed at 1.0147. However, early today in Asian session the pair rebound to the upside and now back inside the range area. Although I prefer a bearish scenario at this phase, I think it's not the best time to trade now. While technically we need consistent move below 1.0166 area to confirm bearish scenario re-testing 1.0000/40 area, on fundamental side focus is now at ECB conference today. Technical bearishness should get support if we have optimistic statement from the ECB.
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