The US dollar remained under selling pressure on Tuesday, resulting in the EUR/USD pair hitting 1.1402, which is its highest value in a week. The US Dollar Index remains above 97.00 and currently trades at 97.13, but earlier today bottomed at 96.70, which was the lowest level since December 10.
The market participants await tomorrow’s events and expect the last fourth hike of interest rates.
Today US President Donald Trump again criticized the Fed for raising rates. Donald Trump warned the Federal Reserve today “not to make a new mistake”.
“I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is. Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!”, wrote Donald Trump on Twitter.
For a second day, Trump tries to put pressure on the Fed’s monetary policy committee, which today started a two-day meeting.
The central bankers meeting is the most important event during the week, as markets expect further signs for the future monetary policy of the Federal Reserve.
EUR/USD technical analysis
The EUR/USD pair hit 1.1402. The speculative interest continued unwinding dollar longs ahead of the US Federal Reserve monetary policy announcement this Wednesday, as the central bank is anticipated to slow its pace of tightening if not pausing it at all.
Moreover, the macroeconomic data from Europe keeps favouring the downside for the EUR/USD pair.
The EUR/USD pair took advantage of the USD weakness during the first half of the day and rose above the 1.14 level for the first time in a week. However, with the dollar recovering a large part of its daily losses during the NA session, the pair retreated from that level and was last seen moving sideways in the 1.1360-1.1370 region, where it was still up around 0.15% on a daily basis.
The EUR/USD pair is now trading below the highs but still above the 50 and 200 Simple Moving Averages. On the other hand, Momentum remains muted.
The level of 1.1380 capped the pair around the turn of the month and is a pivotal point in the range. 1.1402 is the fresh high. The exchange rate of 1.1424 capped EUR/USD last week, and 1.1445 was another high, already back in November.
The level of 1.1360 was the initial resistance line for the pair earlier in the day, and it coincides with the 200 Simple Moving Average. The level of 1.1330 was a swing low last week, and it is followed by the double-bottoms of 1.1305 and the critical 1.1270.
USD/JPY technical analysis
The Japanese yen continues to gain ground this week. In Tuesday’s North American session, USD/JPY is trading at 112.54, down 0.26% on the day.
Ahead of the Asian opening, the pair trades a handful of pips above its 100 DMA, having held above it since last August. Additionally, the pair has bounced several times from the 112.20-112.30 price zone these last couple of months, making of the level more relevant support that if broken, could result in a steeper decline. In the 4 hours chart, the pair remains well below its 100 and 200 SMA which gain modest downward strength well above the current level, as technical indicators maintain their bearish strength near oversold readings.
USD/CHF technical analysis
The USD/CHF pair failed to take advantage of the upbeat macroeconomic data releases from the US and continues to trade in the negative territory near the 0.99 area. As of writing, the pair was down 0.28% on the day at 0.9902.
The pair could face the first technical support at resistance at 0.9910-0.9900 (200-DMA/psychological level), 0.9875 (100-DMA) and 0.9860 (December 11 low). On the upside, resistances align at 0.9950 (20-DMA), 1.0000 (psychological level) and 1.0065 (November 5 high).