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EURUSD:
The EUR/USD exchange rate rose slightly on Tuesday, climbing one-fifth of a per cent and going on to test the 1.0950 area. The value reached a 23-month high as risk appetite in the broader market strengthened ahead of the Federal Reserve’s upcoming rate meeting on Wednesday. The final Harmonised Index of Consumer Prices (HICP) data for Europe is also scheduled for release on Wednesday, although it is not expected to undergo significant change from the preliminary data. On Thursday, European Central Bank (ECB) President Christine Lagarde is scheduled to deliver a speech as the EU leaders’ summit commences the second half of the trading week.
On Wednesday, the Federal Reserve (Fed) will announce its latest interest rate decision. CME’s FedWatch tool shows that market participants largely expect the Fed to maintain the current rate over the next two meetings, with a potential quarter-point rate cut expected at the Federal Open Market Committee (FOMC) meeting in June. The FOMC will also release updated interest rate forecasts this week, which could significantly alter expectations for a rate cut if Fed policymakers’ outlook for interest rates diverges significantly from current market forecasts.
Trading recommendation: SELL 1.0920, SL 1.0980, TP 1.0830
Origin: FreshForex
