EURUSD At Three Month Highs Ahead of The Fed Decision

EURUSD hit fresh three months high as the optimism for a common coronavirus bond from EU boosted confidence for the future of the common currency. The gradual reopening of the economies in Europe also supports Euro. Germany announced today that border control with Switzerland, Austria, France, and Denmark would end on June 15. 

Fed Preview: What to Expect Today

Federal Reserve (Fed) is expected to keep interest rates unchanged while investors will focus on the statement and the Jerome Powell press conference. Fed will also keep the QE programme unchanged and will reiterate that it will use all tools available to protect the economy and to get back unemployment to pro-coronavirus levels. The negative interest rates scenario has rejected by Jerome Powell. 

The Fed will also publish new economic and interest rate forecasts after the quarterly projections in March.

On the economic data worst than expected figures failed to impress investors. The United States Consumer Price Index (CPI) came in at -0.1% below the expectations of 0% in May; the yearly CPI came in at 0.1% below consensus of 0.2%. United States MBA Mortgage Applications came in at 9.3% on June 5 from previous -3.9%. 

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EURUSD Price Analysis

EURUSD is 0.19% higher at 1.1361, making fresh three month highs but odd the daily highs as the bulls drove the price to overbought levels. The RSI (14) index trades at 75 but continues to point to higher levels. A fast correction from current levels is possible.  

On the upside, the first resistance for EURUSD pair stands at 1.1389 the daily high. If the EURUSD breaks that resistance, then the next hurdle is at 1.1457 the high from March 10 trading session. A credible break above might open the way for a test of the March 9 highs at 1.1491.

On the other hand, immediate support for the EURUSD stands at 1.1331 the daily low. Next support area would be met at 1.1243 the low from June 9 trading session. If the common pair breaks that support, then the next target for bears is at 1.1194 the low from June 4th trading session.

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