Despite flashing bullish signals on Tuesday, the bearish momentum took over the market during the first part of the day, as the Euro managed to gather enough momentum to breach the 200-hour SMA and the 23.6% Fibo retracement. A further decline, however, did not follow, as the bottom boundary of a four-month channel circa 1.2320 restricted the pair from moving below this level.
It is likely that the pair tries to re-gain some of the lost positions during the following hours, but with limited success due to the combined resistance of the 200– and 55-hour SMAs being located near the 1.2370 mark.
Meanwhile, some volatility is likely to be introduced in the market later in the evening when the FOMC publishes its meeting minutes at 1900GMT.
