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EUR/USD remains under pressure below 1.1700 after FOMC minutes

5/24/2018, 10:27:42 AMMarket Analysis
EUR/USD remains under pressure below 1.1700 after FOMC minutes

The EUR/USD pair dropped further the FOMC minutes and reached a fresh 6-month low at 1.1675. The moved modestly to the upside, rising to 1.1690. It was hovering near the lows as market participants look into the minutes for clues about the medium-term monetary policy.

The euro was already weak in the market amid political uncertainty in the Eurozone. Guiseppe Conte received a mandate from Italy’s president to become Prime Minister. He is the candidate of the anti-establishment parties League and Five Star Movement.

The US dollar pulled back modestly but continue to consolidate daily gains after the minutes of the last Fed’s meeting. The central bank will let inflation run on top of the 2% target, for a temporary period, while some member saw forward-guidance revisions appropriate soon. Most, at the FOMC, mentioned that next rate hike is likely to be “soon”. Fed rate hike expectations remained steady after the minutes, with prices pointing to June for the next move.

EUR/USD technical levels

To the downside, immediate support could be seen at 1.1660, followed by 1.1620 and 1.1575. On the upside, resistance might be located at 1.1710, 1.1730 (20-hour moving average) and 1.1750.