Dollar Downward Correction May End After Fed Meeting
Last week saw the development of an upward correction in currency pairs such as EUR/USD, GBP/USD, USD/CAD, and USD/JPY. At the start of the current trading week, the pressure from dollar sellers slightly eased, and if the Fed delivers a favourable verdict for the US currency, this corrective movement may come to an end.
EUR/USD
As anticipated a week ago, EUR/USD buyers managed to extend the upward correction to the key range of 1.05401.0500. However, they have so far failed to consolidate above 1.0500. With a corresponding news-driven impulse, the price may decline towards 1.03701.0300.
The technical analysis of EUR/USD indicates a potential end to the upward correction and a resumption of the main downward trend, as a "bearish engulfing" pattern has formed on the daily timeframe. A strong consolidation above the recent highs at 1.0540 could invalidate the bearish scenario for the pair.
Key events that may impact EUR/USD movements:
- Today at 10:00 (GMT+2): Germany's Consumer Climate Index (Gfk)
- Today at 22:00 (GMT+2): US Fed Interest Rate Decision
- Today at 22:30 (GMT+2): Fed Open Market Committee Press Conference
- Tomorrow at 10:00 (GMT+2): Germany's GDP Data
USD/CAD
Despite an abundance of news and increased volatility in other pairs, USD/CAD continues to trade within a narrow six-week range between 1.44501.4270.
At present, the price is trading near the upper boundary of this range. A breakout and consolidation above 1.4450 could lead to further growth of USD/CAD towards the 2020 highs at 1.46701.4600. A rebound or false breakout at 1.4450 may result in a retest of 1.43001.4270.
Key events that may influence USD/CAD pricing today:
- Today at 16:45 (GMT+2): Bank of Canada Monetary Policy Report
- Today at 17:45 (GMT+2): Bank of Canada Interest Rate Decision
- Today at 18:00 (GMT+2): US Crude Oil Inventories
Read more: https://fxopen.com/blog/en/dollar-downward-correction-may-end-after-fed-meeting/
Text source: Forex Trading Blog
