Near-term range is narrowing the Euro turned into directionless mode ahead of this week’s key event – FOMC policy meeting, which is eyed for fresh signals.
Near-term action is extending into third consecutive daily Doji that signals indecision, with mixed daily studies, supporting the notion.
Positive signals from converging 10/20 DMA’s (rising 10DMA is likely to form a bull cross with falling 20DMA) and 14-d momentum breaking into positive territory, were so far countered with a bull-trap above 1.0270 Fibo barrier (38.2% of 1.0786/0.9952) and south-heading stochastic.
Expect initial signal on sustained break of either 10DMA (1.0159) or lift through 1.0270/83 pivots (Fibo 38.2% / daily Kijun-sen).
The Fed is expected to make another 0.75% rate hike on Wednesday that should be a dollar-positive, however, fears that aggressive policy tightening is going to negatively impact economic growth and push the economy towards recession, weighs on the US currency.
In addition, US consumer confidence, later today (July 97.2 f/c vs June 98.7) would provide initial signal about the current condition of the US economy, while US Q2 GDP, due on Thursday (Q2 0.4% f/c vs -1.6% in Q1) will give further details about the situation in the world’s largest economy
Res: 1.0270; 1.0283; 1.0316; 1.0349.
Sup: 1.0179; 1.0157; 1.0129; 1.0078.
