April 28th, Euro came under pressure due to sharp rise in US government bond yields

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On Tuesday, April 27, trading in the EUR / USD pair ended with growth. The euro rose in price by 0.04% to 1.2090. Buyers bounced off 1.2057 but failed to break through the resistance at 1.2093. Strong pressure on the major currencies was exerted by the American debt market ahead of the FOMC meeting and the speech of the head of the US Federal Reserve J. Powell. The yield on 10-year US bonds returned to the level of 1.639% per annum. Investors began to expect that the US Federal Reserve will hint at a change in monetary policy.

Scheduled statistics (GMT +3):

  • 12:00, Switzerland is to publish an Index of Swiss Investor Expectations, based on the ZEW and Credit Suisse for April.
  • 15:30, Canada will announce a change in retail sales for February, as well as a change in the balance of foreign trade in goods for March.
  • 17:00, ECB President Lagarde will deliver a speech in the euro area.
  • 17:30, the US Department of Energy will publish data on oil and petroleum product reserves in the country.
  • 21:00, the FOMC decision on the main interest rate will be announced and the FOMC Covering Statement will be released.
  • 21:30 there will be a press conference by US Federal Reserve Chairman J. Powell.

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Current situation:

At the time of writing, the euro is worth 1.2064. The price returned to the 45th degree (3) and the trend line (4). Since the buyers could not pass 1.2094, a strong resistance was formed there (2). Before the FOMC meeting amid rising Treasury yields, buyers are losing ground. If the trend line fails, then the euro rate will drop to the level of 1.2035 (67th degree (5)). There was one puncture. The price rose above the line.

The economic calendar for Europe is empty, so all the speculators' attention is directed to the speech of J. Powell. A surge in volatility is expected at 17:00 Moscow time during the speech of K. Lagarde. In case of a favorable outcome for the euro, we should expect the price to return to the level of 1.2094. In case of a sharp rebound, a double bottom pattern will form, which will open the way for buyers to the level of 1.2113.

Resume: The strengthening of the euro is restrained by the growth of yields on Treasury bonds ahead of the speech of the head of the US Federal Reserve J. Powell. The FOMC meeting is a key event for the foreign exchange market.

A spike in volatility is expected at 21:30. Time will tell what the euro exchange rate will be after the decision, but investors are thinking that the American regulator will give hints of curtailing soft monetary policy.

If the euro bounces off 1.2056, buyers will have an advantage. If Powell supports the US dollar, then the euro will begin a phase of decline.

Posted Using LeoFinance Beta



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