A Rough FOMC Minutes Week For The Greenback

The Greenback has struggled to secure marketshare this week vs the majors. Today has been the exception, with the USD putting in modest rallies against the euro, Australian dollar, and Swiss franc. Moving into tomorrow’s ECB Monetary Policy Meeting Accounts and Canadian Retail Sales (MoM, March), the USD is poised to regain some of the weekly losses.

Today’s U.S. economic calendar has been filled with key events. Moments ago, the FED’s Richard Clarida issued prepared comments via webcast for the New York Association for Business Economics. Here are the highlights:

  • “The easing of financial conditions is buying some time until the economy can begin to recover.”
  • “The health crisis will be disinflationary, not inflationary, and the data we are seeing so far is consistent with this projection.”
  • “A slowing of FED Treasury purchases in recent weeks are reflecting the substantial improvement in market functioning.”

According to Clarida, there is optimism to be had regarding the end of negative COVID-19 fallout. In addition, the FED has restored liquidity to the marketplace. Of course, Clarida also said that more may be needed from the FED and U.S. government to manage the situation. 

Clarida’s comments did little to sway forex trade of the Greenback. Perhaps Jerome Powell will give traders more food for thought at 2:30 PM EST.

Greenback Struggles Vs The Euro, EUR/USD Rejects Topside Resistance

In a Live Market Update from earlier this week, I outlined a short trading plan for the EUR/USD. The play worked to near perfection, hitting its 25 pip profit target with minimal drawdown. Now, it looks like the EUR/USD is headed for a key downside support level.

EUR/USD, Weekly Chart

Going into Memorial Day Weekend, there are two levels to watch for the EUR/USD:

  • Resistance(1): Bollinger MP, 1.0998
  • Support(1): Weekly SMA, 1.0944

Overview: Friday’s ECB Monetary Policy Meeting Accounts will set the session’s tone for the EUR/USD. More than likely, the ECB will echo the FED, citing COVID-19 uncertainty as being the primary driver of policy moving forward. However, if the accounts are overly pessimistic, the Greenback may take back some of its weekly losses against the euro.

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