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EUR/USD bears remain in control as Fed doves turn into hawks

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 23, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The dollar maintains the bullish tone, pushing the EUR/USD pair back to near 1.12 handle as markets focus on growing number of hawks at the Federal Reserve.

    Fed rate hike talk supports USD

    The greenback has been on a recovery mode since yesterday after Fed policymakers took turns on Monday to talk up April/June rate hike bets. Markets were caught off guard by Federal Reserve policymaker Evan’s transformation from a dove to hawk.

    Investors fear a growing number of hawks at the Fed may result in a sooner-than-expected rate hike. At the time of writing, the pair was trading at the session low of 1.1204. The spot clocked a high of 1.1223 earlier today.

    EUR/USD Technical Levels

    The immediate hurdle is noted around 1.1250 (5-DMA + 61.8% of 1.1714-1.0517 + 100% Fibo of 1.0517-1.1060-1.0711), above which spot could target 1.13. If bears fail to defend the same, doors would be open for a re-look at last week’s high of 1.1336-1.1342. On the other hand, a breakdown of immediate support at 1.12 (10-DMA) could see prices descend to 1.1173 (23.6% of 1.0517-1.1376), which if breached shall shift risk in favor of a drop to 1.1115 (50% of 1.1714-1.0517).
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