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  • Pair losses strength and trims gains, falling back to the 1.1200 area.  
  • Recovery from multi-month lows remains in place but momentum eases.  
  • US Dollar weakens eases over the last hour as Wall Street turns negative.  

The EUR/USD pair moved off highs and fell toward the 1.1200 area during the US session amid month-end flows and a decline in US equity prices. The euro also lose ground against the Pound and trimmed gains versus the swiss franc. At the same time the US dollar is posting mixed results but strengthens over the last hours versus commodity and Emerging market currencies.
A weaker US Dollar ahead of Fed’s day  

Data released today from the US showed an increase in Consumer Confidence measured by the Conference Board with its main index rising to 129.2 in April from 124.2 in March. On the negative front, the Chicago PMI fell to its lowest level since January 2017 at 52.6 in April. Housing data came in above expectations with an increase in existing home sales of 3.8% above the 1.1% increase expected.  

Earlier today, data from the Eurozone showed that GDP expanded 0.4% during the first quarter and 1.2% from a year earlier while inflation in Germany came in above expectations as the CPI rose 2.1% in April (y/y) above the 1.6% expected.  

The key event ahead is the FOMC meeting. Today the Fed started its two-day meeting. No change in its policy is expected but the statement and the press conference could have an impact on the US dollar. “USD to pare gains ahead of the meeting but the post-Fed reaction unclear. Biased to see USD dips short-lived but contained within known ranges. 1.1260 is a key topside pivot for EURUSD that could trigger more USD liquidation however“, wrote analysts at TDS ahead of tomorrow’s events.  

Levels to watch  

At the moment, EUR/USD trades a t1.1204 and it is testing the 1.1200 area. The immediate support level could be seen at 1.1195 (20-hour moving average), followed by 1.1175 (Apr 30 low) and 1.1140. On the upside, the recovery today was capped below the 1.1230 area. A break lower could lead to 1.1260 (Apr 22 & 23 high), the next resistance is seen at 1.1280 (Apr 16 & 17 high).