The Dollar Is Losing Some of Its Gains While Awaiting a Verdict from the Fed

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The American currency continues to trade in different directions relative to leading currencies. Thus, the yen paired with theUS  dollar fell in price to a 34-year low, and in pairs with European and commodity currencies we are seeing a corrective pullback in USD. Whether the main trends will continue, or whether it is worth preparing for a deeper corrective rollback, will be determined by the coming trading sessions:

  • today at 12.00 (GMT +3:00) inflation data in the eurozone for April will be published
  • Today at 17.00 (GMT +3:00) the US consumer confidence index from CB will be released
  • Tomorrow at 21.00 (GMT +3:00) a meeting of the Federal Reserve is scheduled, at which the base interest rate on the dollar and the regulator’s further plans for monetary policy will be announced

EUR/USD

The single European currency has been holding above the key range of 1.0700-1.0600 for the third week. Technical analysis for EUR/USD indicates the possibility of working out a piercing line combination on the weekly timeframe, which could lead to a test of 1.0900-1.0840. A price move below 1.0600 may contribute to updating last year’s low at 1.0450.

In addition to the already mentioned news, today at 13.00 (GMT +3:00) it is worth paying attention to the speech of the Vice President of the German Federal Bank Claudia Maria Buch.

USD/JPY

At the beginning of the current five-day trading period, the USD/JPY pair rose sharply and fell no less sharply, interrupting the exponential growth at the significant resistance of 160.00. Within a few hours, the price lost more than 500 points, testing the previously announced correction level of 154.70.

According to technical analysis for USD/JPY, a bearish harami combination has been formed on the daily time frame, the development of which may lead to the start of a full-scale downward correction for the pair. At the same time, the size of the signal candles is quite large, and the price may first retest recent extremes at 158.40-157.80.