EUR/USD Forecast – Traders Eyeing Comments from NY Fed President Williams for Guidance

The Euro is trading flat against the U.S. Dollar ahead of a key speech by New York Federal Reserve President John Williams at 14:15 GMT.

On Tuesday, Fed Chair Jerome Powell failed to offer any new information about interest rates for traders in a speech, which traders deemed as dovish. U.S. Dollar bulls were somewhat disappointed by Powell, who declined to meaningfully harden his tone on inflation, despite last Friday’s very strong employment numbers.

At 13:59 GMT, the EUR/USD is trading 1.0731, up 0.0003 or +0.03%. On Tuesday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $98.99.

Traders Turn to Data for Guidance

The price action suggests traders have become numb to Fedspeak and have become more data sensitive. This could mean sideways price action until next Tuesday’s U.S. consumer inflation figures are released.

ECB Rates Could Rise Considerably

Investors are also digesting comments from two German European Central Bank (ECB) officials, who said Euro Zone interest rates had a way to rise.

“From where I stand today we need further, significant rate hikes,” German central bank chief Joachim Nagel told the newspaper Boersen-Zeitung on Tuesday.

His colleague Isabel Schnabel said:  “It is not yet clear that monetary policy is actually working so much that we can hope for inflation to return to our inflation target of 2% in the medium term.”

Daily EUR/USD Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.0669 will signal a resumption of the downtrend. A move through 1.1033 will change the main trend to up.

The nearest support is a 50% level at 1.0661. The closest resistance is a 50% level at 1.0758. Additional resistance is another 50% level at 1.0851.

Daily EUR/USD Technical Forecast

Trader reaction to the pivot at 1.0758 is likely to determine the direction of the EUR/USD on Wednesday.

Bearish Scenario

A sustained move under 1.0758 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the support cluster of 1.0669 – 1.0661. The latter is a potential trigger point for an acceleration to the downside with 1.0483 the next target.

Bullish Scenario

A sustained move over 1.0758 will signal the presence of buyers. If this generates enough upside momentum then look for a surge into the minor pivot at 1.0851.