The Euro is trading higher at the mid-session on Monday as investors start to position themselves ahead of this week’s U.S. Federal Reserve monetary policy announcements.
The Federal Open Market Committee (FOMC) is due to meet on Tuesday and Wednesday to discuss policy. Fed Chairman Jerome Powell is then set to hold a press conference following the meeting at 18:00 GMT on Wednesday.
The Fed is expected to reiterate its commitment to easy monetary policy. However, investors will be watching to see if concerns about inflation will have any effect on its forecasts, particularly given last week’s hotter-than-expected consumer price index reading for May.
At 17:26 GMT, the EUR/USD is trading 1.2121, up 0.0014 or +0.12%.
In other news, Euro Zone industrial production was stronger than expected in April, driven by a more than doubling of durable consumer goods output from a year earlier as economies steadily reopened after COVID-19 pandemic lockdowns, data showed on Monday.
The European Union’s statistics office Eurostat said industrial output in the 19 countries sharing the Euro rose 0.8% month-on-month for a 39.3% year-on-year surge. Economists polled by Reuters had expected a 0.4% monthly and a 37.4% annual jump.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.2093 will signal a resumption of the downtrend. A trade through 1.2218 will change the main trend to up.
The short-term range is 1.1986 to 1.2266. The EUR/USD is currently trading on the weak side of its 50% level at 1.2125.
The minor range is 1.2218 to 1.2093. Its 50% level at 1.2155 is the nearest upside target and potential resistance.
Daily Swing Chart Technical Forecast
The direction of the EUR/USD into the close on Monday is likely to be determined by trader reaction to 1.2125.
A sustained move under 1.2125 will indicate the presence of sellers. This could trigger a retest of Friday’s low at 1.2093. This is a potential trigger point for an acceleration to the downside with the main bottom at 1.2052 the next downside target, followed closely by a 50% level at 1.2027.
A sustained move over 1.2125 will signal the presence of buyers. This could trigger a surge into 1.2155. Since the main trend is down, look for sellers on the first test of this level. Overcoming this level will indicate shorts are covering more aggressively.