The Euro eased in early US trading on Wednesday and returned below 200SMA and 1.20 handle after better than expected US ADP private jobs data (204K in Apr vs 200K f/c) offered fresh support to the greenback, deflating Euro’s recovery attempts. Fed is due to release its policy decision later today and focus turns towards the announcement, which is expected to provide fresh signal. The central bank is widely expected to keep interest rates unchanged today, but traders will be looking for signals of the future Fed’s action. Hawkish tone, which would signal more aggressive approach and three hikes this year, would offer fresh boost to already bullish dollar, while softer tone would provide Euro bears further breather and signal stronger correction of 1.2413/1.1981 fall. Bearish scenario is expected to confirm break through 200SMA and 1.20 support and open way for extension towards 1.1936 (Fibo 61.8% of 1.1553/1.22555) and 1.1900 (round-figure) in extension. Dovish tone from Fed would allow for stronger recovery and expose initial barriers at 1.2083 (Tuesday’s high) and 1.2100 (round-figure).
Res: 1.2012; 1.2031; 1.2055; 1.2083
Sup: 1.1981; 1.1936; 1.1915; 1.1900
