US Dollar Weakens Across the Board after FOMC Minutes. Resistance Still Stands
Forex News: The pair dropped below support but price action was irregular and characterized by quick reversals in the first part of the day. The FOMC Minutes didn’t show any major surprises but the US Dollar weakened and the pair climbed into the 50 period Exponential Moving Average.Technical Outlook
Yesterday’s climb took the pair into a confluence zone created by the 50 period EMA and 1.1775; this resistance will be tough to break but if the bulls can take price above it, this will show US Dollar weakness and will possibly trigger a move into 1.1840. On the other hand, a bounce from the current zone will show that the move up was just an impulsive market reaction and will make 1.1713 the immediate target, followed by 1.1650.Fundamental Outlook
At 9:00 am GMT the Final version of the European Consumer Price Index is released, showing changes in the price that consumers pay for the goods and services they purchase. The CPI is the main gauge of inflation and a higher number usually strengthens the currency but the Final version tends to be the least important. Today’s forecast is a change of 1.3%, same as previous.
Later in the day the U.S. Industrial Production is released, showing changes in the value of output generated by mines, utilities and manufacturers. The impact of the indicator is medium, with higher numbers than the forecast 0.3%, strengthening the US Dollar.
The pair had a choppy session ahead of the FOMC Minutes release, hovering close to 1.2850 support after a bounce at resistance. The Dollar weakened across the board when the Minutes were released but resistance was not broken.Technical Outlook
It is clear now that 1.2850 is strong support and this fact combined with the oversold condition of the Relative Strength Index and the FOMC Minutes triggered a jump higher. However, this is just noise until a key level is broken (in this case, 1.2900). As long as price remains below the mentioned resistance, our bias is bearish, anticipating a break of 1.2850.Fundamental Outlook
The Pound will be affected today by the release of the British Retail Sales, scheduled at 8:30 am GMT. The indicator shows changes in the total value of sales made through retail outlets and generally has a high impact. Today’s expected value is 0.2% and numbers above that usually strengthen the currency.