Yesterday, the Forex market was dominated by risk sentiment, which reduced the demand for safe-haven currencies, one of which is the US dollar. Well, the statement of the president of the Federal Reserve Bank of Dallas that it will be possible to talk about raising interest rates no earlier than in a year further increased the pressure on the US currency. As for the euro, yesterday's statistics from the eurozone on GDP for the first quarter fully coincided with forecasts. The change in the number of employees in the countries of the single European currency could not affect a sufficiently significant strengthening of the euro against the US dollar.
Today at 10:00 London time, data on the consumer price index will be received from the eurozone. However, the main event of today and the whole week will be the publication of the minutes of the last FOMC meeting. From this protocol, it will become clear how the votes of the Open Market Committee members were distributed when deciding on monetary policy. I believe that there will be no significant changes in the protocols. It will turn out that the vast majority of Fed leaders still take a "dovish" position and believe that the time has not yet come to start tightening monetary policy. In particular, much of this will be attributed to the COVID-19 pandemic, the consequences of which for the economy are not yet evident and understandable.
Daily
As a result of yesterday's reasonably strong growth, the main currency pair, as expected the day before, not only broke through the resistance of sellers at 1.2181 but also ended Tuesday's session above the significant mark of 1.2200, specifically at 1.2221. Today, at the time of writing, the euro/dollar shows an upward trend and is trading near the resistance of 1.2242, where the maximum values were shown on February 25 of this year. It can be assumed that the breakdown of this mark will strengthen the bullish sentiment for EUR/USD and send the pair to the next resistance level, which passes at 1.2349. Naturally, this will only happen if today's publication of the FOMC minutes disappoints market participants and the pressure on the US currency continues. Suppose the Fed minutes can significantly change the market sentiment and affect the change in the technical picture. In that case, the US dollar will begin to adjust to its latest decline or even completely change its current trend to an upward one. For such a condition, a false breakout of the resistance of 1.2242 and the appearance of a reversal pattern of candle analysis with a long upper shadow and a closing price below 1.2240 or even better below 1.2200 are necessary. In the meantime, judging by the daily chart, there are more prerequisites for continued growth. However, much will depend on the evening publication of the FOMC minutes.
H1
After yesterday's rise above the important level of 1.2200, we see that the market took a break and began to consolidate. Usually, this happens before a new strong impulse, and most often, the movement continues along with the trend. However, buying under the resistance of 1.2242, in my personal opinion, is quite uncomfortable. I suggest waiting for short-term pullbacks to the price zone of 1.2205-1.2190 and consider opening long positions. Judging by the previous Doji candles, you can count on such a pullback. In tomorrow's article, we will analyze the details of the Fed's protocol and evaluate today's trading recommendations.
