The USD on Monday closed up against the EUR. The euro/dollar was down against Friday"s 1.1079 minimum. Trading volumes are still low on the market at participants lie in wait for central bank announcements.
A two-day FOMC meeting begins on Tuesday. No one expects the Fed to change their rates this time round. Market participant attention will be on Yellen"s speech which follows the meeting.
Important economic data which could have an effect on the currency pairs is nowhere to be seen. Due to this I expect to see the euro drop to 1.1055.
Day"s News (EET):
12:00, Eurozone employment level for Q4.
14:30, US retail sales changes and PMI for February.
16:00, US housing market index from NAHB for March and changes in business inventories.
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22:00, purchases of American long-term assets by foreign investors in January.
Intraday target maximum: 1.1130, minimum: 1.1055, close: 1.1075.
Intraday volatility for last 10 weeks: 103 points (4 figures).
The sellers on Monday managed to strengthen below the LB (1.11) This is a bearish signal for the market since a fall below 1.1065 will see the road to 1.10 open up for the sellers.
Whilst the price is above 38% of growth from 1.0821 to 1.1217, a euro strengthening could resume at any time. An important intra-day resistance is at 1.1150.
Keep an eye on the euro/pound cross rate. The euro in this cross is set to weaken. A fall of the cross due to a USD strengthening would see the euro/dollar fall to1.1020 on the European session without taking any pit stops.