EUR/USD bounces before 1.1050 after FOMC!

21 de nov. de 2023

The EUR/USD reached a minimum at 1.0899 after the release of the FOMC minutes and then rose to 1.0920. The Fed's document held no surprises, and the US dollar consolidated gains after bouncing back from new monthly lows. Currently, the EUR/USD pair fluctuates around the 61.8% Fibonacci retracement level at 1.0959, facing static resistance. Despite being overbought, technical indicators suggest an upward trend. Analyzing the technical picture, the daily chart indicates a high overbought condition, but the trend remains bullish. Technical indicators point upward, reaching new multi-week highs. In the short term, according to the 4-hour chart, the EUR/USD presents a neutral-to-bullish stance. Technical indicators have lost some bullish strength but consolidate well in positive territory, with the Relative Strength Index (RSI) maintaining within overbought levels. Additionally, financial markets maintain an optimistic tone, pushing the EUR/USD towards the psychological threshold of 1.1000. Wall Street recorded substantial gains on Monday, with the positive momentum extending into the Asian session. However, caution has increased after the opening of London, as investors await the Federal Open Market Committee (FOMC) minutes. Before the release, market players are intensifying bets on a potential interest rate cut in May 2024. Meanwhile, a successful 20-year US Treasury auction on Monday influenced the US dollar while supporting equity markets. The highest yield accepted by investors was 4.78%, slightly below the initially issued yield of 4.79%, indicating strong demand. Speculative interest is betting that US interest rates will fall next year, following the Federal Reserve's recent decisions suggesting the end of the tightening cycle. Additionally, it is noted that the price has made a perfect rebound in the 1.09 area, leading us to believe that the pair may continue long with a target of 1.1050.