The Euro was weaker after Fed on Wednesday and ended trading in red but remains within 1.0850/1.0950 congestion that extends into eight straight day. Fed’s statement did not bring anything significantly new, being in a rather familiar tone and pointing that interest rate increases will be gradual in 2017. Fed pointed to the labor sector which continues to strengthen, while inflation continues to run near 2% target. Markets understood Fed’s tone as hawkish and subsequent dollar’s rally came as a result of rising expectations of rate hike in June. However, the single currency was not seriously impacted by stronger dollar, remaining in directionless mode and awaiting further signals from two coming events, US Non-Farm Payrolls due on Friday and the final round of French presidential election on Friday. From the technical point of view, situation remains unchanged compared to few previous sessions. Rising 10 SMA (1.0877) is so far holding today’s action, which moved within narrow range in Asia and guarding key 200SMA support (1.0831). Violation of the latter is needed to generate stronger negative signal, while extension below 1.0800 zone (Fibo 38.2% of 1.0568/1.0949 / base of 4-hr cloud) would confirm reversal. Otherwise, near-term focus will remain shifted higher while 10SMA holds with break above 1.0950 pivot to open way for 1.1000+ extension.
Res: 1.0900, 1.0935, 1.0950, 1.1000
Sup: 1.0873, 1.0850, 1.0831, 1.0800
