Dollar Reacts Positively to the FOMC Minutes. More Downside to Follow?
Forex News: The US Dollar strengthened ahead of the FOMC Minutes release and the pair broke through support. The Minutes added greenback strength and the pair returned below 1.1340 after a brief climb.Technical Outlook
At the time of writing the pair is showing signs of indecision (candles with long wicks) and is trading very close to the 50 period Exponential Moving Average, so a clear bias is not in place. However, it seems the US Dollar is reacting positively to the FOMC Minutes and the pair is coming down after an extended period of being overbought, so we can expect a touch of 1.1280 as long as the bears can keep price below the 50 EMA.Fundamental Outlook
Today at 12:15 pm GMT we take a first look at the American jobs situation with the release of the ADP Non Farm Employment Change, a report that shows changes in the number of employed people, excluding the farming sector and Government. The forecast is 184K, lower than the previous 253K and usually, numbers above expectations strengthen the US Dollar but the impact is lower than the Non Farm Payrolls released Friday.
The British Services PMI released yesterday came very close to analysts’ forecast, so the impact was low and the pair had a slow trading session until the release of the FOMC Minutes. Some US Dollar strength was seen but the pair is still above support.Technical Outlook
Several four hour candles have touched the support at 1.2900 and were rejected there, creating long wicks in their lower side. This is a sign of bullish pressure, so if we don’t see a break of support soon, we expect the pair to climb towards 1.2975 – 1.3000. If the level at 1.2900 and the 50 period Exponential Moving Average are broken soon, we will probably see a touch of 1.2850. Our bias is mostly neutral until this bounce or break scenario unfolds.Fundamental Outlook
The United Kingdom didn’t schedule major releases for today so the pair’s direction will be mostly decided by the technical aspect and the U.S. jobs data.