Ok, so tapering has now been priced in by the markets. A Fed decision-maker alluded to this last week. It is no longer about tapering for the US Dollar but about employment and future rate adjustments. Speaking on the latter, Fed Chair Jerome Powell said that rate hikes were not on the cards anytime soon. Another decision-maker also said tapering had to be separated from interest rates.
With the Fed saying it will start tapering in late-2021 but deferring interest rate decisions, it has given out dovish signals, putting the USD under pressure this Monday. As such, the EUR/USD is trading flat, ahead of Friday’s Non-Farm Payrolls (NFP) report.
Technical Outlook for EUR/USD
The active daily candle forms a doji just under the resistance level at 1.18008. Rejection and an accompanying decline targets 1.17505, with 1.17036 and 1.16527 also lining up as additional targets to the south.
On the flip side, the breakout from the falling wedge must overcome the resistance at 1.18008 for 1.18395 to become available as a new target. 1.18927 is the projected completion point for the wedge’s measured move and comes up next in line if the advance continues.