EUR/USD: bearish below the 20 Week SMA at 1.1048

By FXStreet FXStreet (Guatemala) – EUR/USD is trailing along the lows in a strong US dollar environment after yesterday’s relatively uneventful FOMC which was a bit of a let down.

However, the main takeaway is that Yellen is confident in respect of reaching their inflation target, although there was a small downgrade to 2016 inflation. She also feels there is still slack in the economy and rate rises will be gradual (unless sharp rises in inflation of jobs growth). According to the dot plot there should be a series of further rate hikes in 2016.

The dollar is bid on Central Bank divergences and data will continue to be key. Today, in the EZ, German IFO were lower than expected while US initial jobless claims were a marginal improvement of expectations. However, the year is winding down here and the second tier data release may be mostly non events. The markets might play out volatile in thin holiday and there will be repatriation flows into the dollar offering it continued support.

EUR/USD levels

Technically, price is heading towards the 20 DMA at 1.0786 while the 200 has crossed below the 100 DMA at 1.1056/35 respectively and this too is a …read more

Source:: FX Street