EUR/USD – Euro drifting ahead of Federal Reserve rate statement

It continues to be an uneventful week for EUR/USD. The pair is unchanged on Wednesday, trading at 1.1353, up 0.02% on the day. On the release front, German PPI declined by 0.1%, shy of the estimate of 0.2%. This marked the second decline in three months. The Federal Reserve releases its monthly rate statement. On Thursday, the E.U. holds an economic summit. The U.S. will release the Philly Fed Manufacturing Index and unemployment claims.

The Federal Reserve is virtually certain to hold the benchmark rate at the Wednesday meeting, but traders should nonetheless treat the meeting as a market-mover. Policymakers have been sending out dovish messages, and if the Fed reaffirms that it will remain cautious and patient, the dollar could lose ground. The Fed’s balance sheet will also be under scrutiny, with the policymakers expected to announce when they will stop reducing the $4 billion balance sheet. The central bank has been reducing assets by $50 billion a month, but there has been criticism that this tightening is choking economic growth. The Fed will also publish its new dot plot, a quarterly release which is used to convey its interest rate outlook.

European leaders will meet in Brussels on Thursday, where Prime Minister May will request an extension for Brexit. The Europeans are exasperated by turmoil surrounding Brexit and the inability of the British government to pass the withdrawal agreement in parliament. Jean-Claude Juncker, the President of the European Commission, said on Wednesday that the E.U. would not provide May with an answer right away and would meet for consultations next week. The clock is ticking, with Britain scheduled to leave the E.U. on March 29.

Aussie slides amid weaker economic data

Fed in focus as Brexit Strolls into Final Week

Dollar mixed ahead of Fed

EUR/USD Fundamentals

Wednesday (March 20)

  • 3:00 German PPI. Estimate 0.2%. Actual -0.1%
  • 10:30 US Crude Oil Inventories. Estimate 0.5M
  • 14:00 US FOMC Economic Projections
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.50%
  • 14:00 US FOMC Press Conference

Thursday (March 21)

  • All Day – EU Economic Summit
  • 8:30 US Philly Fed Manufacturing Index. Estimate 4.6
  • 8:30 Unemployment Claims. Estimate 226K

*All release times are DST

*Key events are in bold

EUR/USD for Wednesday, March 20, 2019

EUR/USD for March 20 at 7:40 DST

Open: 1.1351 High: 1.1357 Low: 1.1336 Close: 1.1353

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1120 1.1212 1.1300 1.1434 1.1553 1.1610

EUR/USD has showed little movement in the Asian and European sessions

  • 1.1300 is providing support
  • 1.1434 is the next resistance line
  • Current range: 1.1300 to 1.1434

Further levels in both directions:

  • Below: 1.1300, 1.1212, 1.1120 and 1.1046
  • Above: 1.1434, 1.1553 and 1.1610

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.