EURUSD poses an upside stance, FOMC minutes, ISM on tap on Wednesday. Will it continue its surge? Only time and trade will tell.
In Asia, the main pair has stalled its surge amid a pause in USD sell-off, as sellers continued to lurk near 1.2065. Finding support near the 1.2033 area, EURUSD’s upside stance was supported by the pause in the buck’s sell-off as well as by the consolidating US dollar index. The US dollar index (DXY), which measures the greenback’s strength against a basket of six of its major counterparts, sees consolidation near 91.65.
The positive sentiment around the EUR is bolstered by the optimistic prospects regarding the eurozone economy, in the long run, especially following the upbeat German and Eurozone final manufacturing PMI reports. Analysts suggest that this may lead to the ECB shortening their monetary stimulus program sooner than expected.
Furthermore, the latest statement of the ECB Governing Council member Benoît Cœuré, who said that in his opinion, there was a “reasonable chance” that bank’s bond-buying activities would not extend beyond the set September date, provides extra support to the EURUSD upside stance with FOMC minutes and ISM in the pipeline.
Bulls and bears are looking for more impetus in the pair’s trading today from the second-liner German unemployment change report preceding the release of the US ISM manufacturing PMI and the latest FOMC minutes.
Technicals Behind the EURUSD Upside Stance Ahead of FOMC Minutes
In the year just passed, the euro hit a peak at 1.2092 against the buck, whereas in January 2015 the EURUSD highs were set at 1.2101. Taking a closer look (historically) at the charts of the past two years, we find that 1.2100 levels form a major static resistance area. A break above that line will most likely lead to stops, which, in turn, will trigger steeper progress towards the 1.2260 levels later in the week.