EUR/USD flirts with 1.1900 on entering the Fed day
- EUR/USD wavers around the round-figure following its bounce off 1.1882.
- US stimulus, reflation fears highlight today’s Fed decision.
- Geopolitics, vaccine jitters add challenges to the risk.
EUR/USD stays steady around 1.1900, after a three-day losing streak, during the initial Asian session trading. In doing so, the currency major portrays the typical pre-Fed moves while paying a little attention to the extra burden on the risk news emanating from Asia, Europe and the Middle East.
Although the Fed’s appreciation of the $1.9 trillion stimulus is highly anticipated, the policymakers’ quarterly forecasts and dot-plot will be the key to watch. It should be noted that the markets will pay extra attention to how Fed Chair Jerome Powell rejects the reflation fears, like his other Western friends.
Read: Federal Reserve Preview: The Good, the Bad and the Ugly edition, three critical things to watch
Iran’s alleged secret build of nuclear weapons and the UK’s readiness to combat it beyond the deal joins North Korea’s likely weapon testing to exert additional downside pressure on the risks. Also, news that the US is up for sanctioning Russia over the election meddling and Biden Administration’s readiness for a robust and frank talk with China during this week offer further challenges to optimists. It should be noted that vaccine jitters in the European Union (EU) is the widely known hurdle to sentiment off-late.
Even so, S&P 500 Futures print mild gains while ignoring the mixed performance of the Wall Street benchmarks. Though, the clues could be traced from the US 10-year Treasury yield that stops recovery moves from 1.60% around 1.62% by the press time.
It’s worth mentioning that the European Consumer Price Index (CPI) for February could offer an intermediate direction to the EUR/USD prices. However, major attention will be given to the US Federal Reserve’s (Fed) qualitative moves as the central bank isn’t expected to offer any policy changes.
Technical analysis
Unless breaking 1.1990-2000 resistance confluence comprising 21-day EMA and the recent swing high, EUR/USD is likely declining towards the yearly bottom surrounding 1.1835.