Financial markets started the week with stable after last week woes in Europe, with the dollar back under pressure across the board. The common currency is a lager, barely 20 pips above Friday’s close, and having printed so far a daily high of 1.1227. A scarce macroeconomic calendar in Europe and the US, and with market’s attention still centered in the UK, the pair will likely remain range bound this Monday, with the scale lean towards the upside amid dollar’s weakness.
Later this week, the US Federal Reserve is having a “live meeting” with new forecasts, a press conference and a probable rate hike included, which may keep investors sidelined in the next 48 hours, although with the pair at current levels, the risk remains towards the upside.
From a technical point of view, the pair is stuck around a bearish 20 SMA that converges with the 100 SMA in the 4 hours chart around 1.1220, while technical indicators are recovering, but within bearish territory, indicating that buying interest is still limited. Should the pair accelerate through 1.1230, the pair has scope to return towards the 1.1280 region, but it will take a break above 1.1300 to confirm additional gains ahead, towards the 1.1340/50 region.
The downside remains well limited by buying interest around 1.1160, with the next intermediate support at 1.1120 and a stronger one at 1.1080. This last could come in play next Wednesday with the Fed but seems unlikely that the pair will approach to it ahead of the event.
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