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EUR/USD Slide Continues After FOMC Minutes

EUR/USD Slide Continues After FOMC Minutes

Walker England, Forex Trading Instructor


Talking Points

  • The EUR/USD declines on FED meeting minutes from April
  • Trend based breakouts begin beneath the S4 pivot at 1.1158
  • SSI Reads neutral at +1.03

The EUR/USD continues to slide this morning, as the US Dollar rallies against the majors. This decline has been precipitated by the FED releasing the minutes to their April FOMC meeting. While a rate hike is far from certain at Junes meeting, traders are beginning to see it as a possibility. As such, the U.S. Dollar continues its advance, with the EUR/USD declining as much as 427 pips for the month of May.

EUR/USD 30 Minute Chart with Camarilla Pivots

(Created using Marketscope 2.0 Charts)

What’s next for the US Dollar? Find out more with our Free Dollar forecast!

Technically, day traders may begin to look for support today near 1.1186. This point is denoted as the R3 pivot in the graph above, and represents today’s value of range support. If prices manage to stay above this value, it suggests that any further EUR/USD declines may at least temporarily stemmed. It should be noted that range resistance is found at the R3 pivot at 1.1242. A move to this value, would suggest that the EUR/USD is at least temporarily retracing. In this scenario traders looking to join the trend, may look for prices to move lower back towards values of support.

Traders looking for another bearish breakout should continue to monitor the S4 pivot point located at 1.1158. A breakout below this point would be significant, as it would be the 4th bearish breakout in the last 6 trading sessions for the EUR/USD. If price action moves through this value of support, traders may extrapolate a 1X extension of today’s 56 pip range, to place preliminary bearish targets near 1.1102. Alternatively, in the event of price reversal, traders should begin to monitor the R4 pivot point at 1.1270. Again, by extrapolating a 1X range extension, bullish breakout targets may be found near 1.1326.

EUR/USD Speculative Sentiment Index as of Thursday, May 19, 2016

Sentiment totals are being tracked in real time. Find out more at the DailyFX’s sentiment page.

SSI (speculative sentiment index) for the EUR/USD has shifted significantly and now reads at -1.03. This value has neutralized from the last reported value of -1.61. If sentiment flips positive, it would be the first time it has done so in the previous 3 months. This change may suggest further declines for the EUR/USD. Conversely in the event of a bullish reversal, traders should look for SSI to move back towards negative extremes.

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See Walker’s most recent articles at his Bio Page.

Contact and Follow Walker on Twitter @WEnglandFX.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.