EUR/USD spikes to 1.1070, FOMC in focus

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 28, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - A bunch of ECB officials crossing the wires in last hours and commenting on the QE program, triggered a sudden spurt of buying around the EUR, driving EUR/USD closer towards Tuesday’s highs.

    EUR/USD finally breaks through 1.1050-55 band

    The EUR/USD pair trades 0.11% higher at 1.1058, easing-off fresh session highs recorded at 1.1068. The main currency pair erased losses and swung back higher into gains after a string of comments from ECB officials over the past one hour boosted the bids for the euro.

    ECB member Peter Praet noted that the central bank will ensure price stability while ECB’s Hansson played down the need for further QE in Dec on the back of the recent slump in the EUR level.

    Moreover, broad based US dollar weakness along with widespread nervousness ahead of the Fed’s outcome, also partly contributed to the rally in the EUR/USD pair.

    Heading into the US opening bells, focus now remains on the key FOMC decision. Markets have almost priced-out Oct rate hike chances, citing weaker US fundamentals and a stronger US dollar as the key reasons that might keep the Fed on-hold today.

    EUR/USD Technical Levels

    The pair finally managed to surpass 1.1050 levels, eyeing next resistance at 1.1079/81 (Tuesday’s High + 200-DMA), beyond which 1.1100 (round number) would be tested. A break above the last, 1.1154 (100-DMA) would come into the picture. To the downside, the immediate support is located at 1.1002/00 (daily S1 + psychological levels) might be reached. Selling pressure will intensify below the last, dragging the pair towards 1.0956/59 (daily S2 + Aug 11 Low) and below that 1.0840 levels could be exposed.
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