Dollar Downward Correction May End After Fed Meeting
FXOpen
Last week saw the development of an upward correction in currency pairs such as EUR/USD, GBP/USD, USD/CAD, and USD/JPY. At the start of the current trading week, the pressure from dollar sellers slightly eased, and if the Fed delivers a favourable verdict for the US currency, this corrective movement may come to an end.
EUR/USD
As anticipated a week ago, EUR/USD buyers managed to extend the upward correction to the key range of 1.0540–1.0500. However, they have so far failed to consolidate above 1.0500. With a corresponding news-driven impulse, the price may decline towards 1.0370–1.0300.
The technical analysis of EUR/USD indicates a potential end to the upward correction and a resumption of the main downward trend, as a "bearish engulfing" pattern has formed on the daily timeframe. A strong consolidation above the recent highs at 1.0540 could invalidate the bearish scenario for the pair.
Key events that may impact EUR/USD movements:
- Today at 10:00 (GMT+2): Germany's Consumer Climate Index (Gfk)
- Today at 22:00 (GMT+2): US Fed Interest Rate Decision
- Today at 22:30 (GMT+2): Fed Open Market Committee Press Conference
- Tomorrow at 10:00 (GMT+2): Germany's GDP Data
USD/CAD
Despite an abundance of news and increased volatility in other pairs, USD/CAD continues to trade within a narrow six-week range between 1.4450–1.4270.
At present, the price is trading near the upper boundary of this range. A breakout and consolidation above 1.4450 could lead to further growth of USD/CAD towards the 2020 highs at 1.4670–1.4600. A rebound or false breakout at 1.4450 may result in a retest of 1.4300–1.4270.
Key events that may influence USD/CAD pricing today:
- Today at 16:45 (GMT+2): Bank of Canada Monetary Policy Report
- Today at 17:45 (GMT+2): Bank of Canada Interest Rate Decision
- Today at 18:00 (GMT+2): US Crude Oil Inventories
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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