- EUR/USD inches 0.1% higher on weaker dollar
- Fed unlikely to announce changes to the stimulus policy
- Fed and ECB data to offer insight into the looming recession
The EUR/USD currency pair inched higher by 0.1% as the US dollar continued to show weaknesses ahead of the Federal Reserve and European Central Banks’ meetings on Wednesday and Thursday.
The dollar could rally as Fed numbers provide insight on recession concerns
The central banks are expected to give an update on how the COVID-19 pandemic has impacted the economy and analysts have predicted a 3.9% decline in GDP in Q1. The figures will highlight the deterioration of the economy and shift the attention of investors to the imminent recession which will spark a rush for the dollar.
It is unlikely that there will be any stimulus policy changes after what has been witnessed in the past month. The Fed responded to the coronavirus economic downturn by buying treasury bonds, cutting rates as well as supporting credit markets.
The main focus will be on the economic projection numbers and how deep the COVID-19 has hit the economy. The numbers will offer insight into the extent of the looming recession and how long the central banks will keep the monetary stimulus policy in place.
The pair has gained almost half a percentage point and it is aiming horizontal resistance at $1.0894 that was unrealistic last week. However, since the EUR/USD recently sank into new monthly lows, some traders could likely find themselves in the uncharted territory of the bullish move.
This will offer a boost for a recovery and ECB’s data on Thursday could set the mood for the currency pair. Interestingly more weakness for the dollar could see the EUR/USD form resistance above $1.0894 with the next target being $1.1000.
Time : 29-04-2020
Pivot : 1.0848
Technical View : Long above 1.0868
Target : 1.0888
Comments : Bullish move and pair could rack more gains on a weaker dollar
Last Price : 1.0835