The pair ended the previous session flat at $1.1078 and is trending lower in early trade on Wednesday, as investors digest the latest in trade headlines whilst looking ahead to the release of the FOMC minutes later today and ECB minutes to be released tomorrow.
Dollar traders will now look ahead to the release of the FOMC minutes. Traders will be keen to see the deliberations from the meeting 30th October where the Fed cut interest rates for a third and final time in this cycle. The minutes come following two testimonies by Fed Chair Powell in Congress, which means that they could be considered slightly old hat and are unlikely to create any major moves in the market.
The release of the OECD economic outlook is expected to confirm lacklustre growth in the eurozone. The latest OECD economic projections report back in September pointed to a mere 1.1% growth in 2020 and 1% growth in 2021. The report could reinforce slowdown fears.
Looking ahead minutes from the ECB meeting will be eyed closely amid growing unease within the central bank over unlimited quantitative easing. Should the discussions show an increasing resistance to the ongoing easing programme, the euro could receive a boost. Then it will be up to Christine Lagarde to pull governments on-board for a boost in fiscal stimulus.
Levels to watch:
The pair has failed to hold onto to the uptrend which started early October. In failing, the pair has broken through 100 & 50 sma on 4 hr chart, a bearish sign although the 200 sma remains intact.
Immediate support can be seen at $1.1055, prior to $1.1045 and $1.1015. On the upside resistance is seen at $1.1090, $1.1110 before $1.1130.
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