EUR/USD is trading above 1.26 and holding on to most of its gains despite strong evidence of weakness in Germany and despite encouraging figures from the US. The dollar correction is still with us. Can it last through the FOMC meeting minutes? That is the big event of the day.
Here’s a quick update on technicals, fundamentals and sentiment moving the pair.
- Asian session: The pair slid down from the highs back to below 1.2660.
- Current range:Â 1.26 to 1.2660.
Further levels in both directions:
- Below: Â 1.26, 1.2570, 1.25, 1.2445 and 1.24
- Above: 1.2660, 1.27 and 1.2750.
- 1.2660 is strong resistance- where the now broken uptrend began but it is weakening now.
- 1.25 is a very round number (USD/EUR 0.80) and proved its strength.
EUR/USD Fundamentals
- 18:00 FOMC Meeting Minutes
* All times are GMT.
For more events and lines, see the EUR/USD.
EUR/USD Sentiment
- Dollar sell-off: After the strong NFP (see below) came the hangover. In an orderly fashion, the dollar was sold off and EUR/USD rose gradually, even temporarily breaking above 1.2660. However, as the chart shows, this has resulted in a higher low.
- German weakness: Both German factory orders and industrial output fell sharply in August. While there is some seasonality here, this “hard data†contrary to the “soft data†coming from PMIs, is certainly worrying.
- FOMC minutes anticipated: The minutes from the latest meeting might be more hawkish than the message we  hear from Chair Yellen, given previous releases. This is the big event of the week, due on Wednesday. JOLTS is also closely followed by the Fed and it certainly surprised to the upside.
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