Good morning traders.
Prior to the big match at the Fed last night we had another pretty tight range bound day. No levels triggered so another day with nothing to update our performance chart with.
But everything changed with Powell´s dovish FOMC statement which unleashed a fair bit of excitement and propelled the eurusd up the chart.
He was dovish on further potential rate hikes by excluding language that had previously been in the statement and added that the Fed is prepared to adjust balance sheet normalization. This was seen by the markets as Powell changing his stance from hawkish to a more neutral position if not fully dovish.
Powell´s rhetoric last night signaled that he was listening to the markets (or Trumps?) plea for patience and flexibility and certainly did no harm to risk on sentiment with the Dow trading above 25000 again.
Consequently this opens up the eurusd to move further up the chart as the USD weakens. Whether it can break out of the top of this range (above 1.15) and hold higher prices is still to be seen. Remember the ECB is equally if not more dovish.
On the whole though this statement from the Fed seems to be constructive for the eurusd pair and we closed yesterday at 1.1480 and have pushed up to 1.15 as I write this morning. 1.16 looks to be in the headlights and perhaps higher but time will tell. This range has been very persistent!
So lets look at the charts.
The Daily Chart
From the daily perspective the levels to the upside are pretty clear, 1.1550 and 1.16 are well within reach if the market decides that is what´s needed. Above 1.16 is more of a stretch as we have some clear ground to cover before the next high which comes in around 1.18.
I have mentioned before that the area between 1.1650 ish and 1.1730 is a form of gap or void which is yet to be tested. Maybe this will act as a magnet for higher prices. However, lets see if it can take 1.16 first.
The Hourly Chart
Levels as per. For the moment it seems that we are in buy the dip mode and if so any move back to 1.1480 and 1.1450 should be defended if we are indeed looking for higher prices.
Have a good day and, who knows, maybe we are about to get the chance to talk about some new levels in the next few weeks:).