May 20th 2021
The minutes from the US Federal Reserves meeting in April threw up a little surprise, that members were talking about the possibility of changing monetary policy at some time in the future. Provided the US economy continues to make a strong economic recovery.
The meeting of course was the week before the big NFP data miss, and higher Inflation reports. The talk in the FOMC minutes changes nothing as real US Interest rates continue to undermine the US Dollar.
Support today is found now at 1.2160, if broken you could see a drop to 1.2120 or 1.2100
Light resistance is at 1.2200 and if the market can break it, we will have another attempt at 1.2240, yesterdays high.
The sentiment remain bullish, however the Euro was overbought and this correction is healthy and an opportunity to buy.
Yesterday I was looking for a downside correction, after the market failed at the high of 133.40, and we did get a drop to 132.70.
this morning we are consolidating below resistance at 133.20, a break back up will see an attempt at the recent highs.
However, another failure or lower high, would encourage an attempt at support in the 132.60/70 region. A break of this area opens a possible drop to 132.10
The Euro managed to trade to the top of the recent range briefly breaking resistance at 0.8640. If the EUR remains in the ascendancy over the Pound, you will see further gains to 0.8670/80
Any dips will be met by buyers at 0.8610, if broken we would see a bigger drop to 0.8580 or 0.8570 the bottom of the recent trading range.
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