During the Wednesday’s session, the greenback rose against the euro after the results on the Fed’s July meeting were released. 

The reports exceeded the investors’ expectations showing that the central bank will start terminating the QE program in the nearest future. However, the officials did not provide market participants with more exact date.

The U.S. dollar ended up posting 64 points against the euro. The volatility constituted 93 points.

Fundamental review:

Fundamental data proves that the existing home sales leaped in July. According to the National Association of Realtors, the indicator went up by 6.5% on a yearly basis to 5.39 million comparing with the previous month.

The economists had expected the sales to post 5.15 million per year. In comparison with the last year, the existing home sales surged by 17.2%. 

Technical analysis:

Negative sentiment among the consumers caused the euro decline before the Fed’s reports release. To date, the pair has come back to the side price channel, which has been observed since August 16. In general, the pair has still been trading in uptrend price channel, the lower limit of which is between the minimum level of August 20, 1.3233, and today’s minimum of 1.3330.

The trade has carried on above the support level of 1.3315 so far, thus, the traders can still hope that the uptrend will come back. However, if the bears push EUR/USD below this level, the pair can fall further to the level of 1.3293 and 1.3269. The farthest short position target will be the 1.3236 area.

30-day moving average broke down the 50-day daily average that shows only market correction.

The big buyers will come back on the market in case the pair consolidates above the level of 1.3352. Then, the USD/EUR pair can continue rebounding and hit the level of 1.3412.

The Bollinger Bands indicator reversed downwardly showing the turnaround. The trade is carried out in the lower area of the channel; the middle band, which is in the 1.3357 area, acts as dynamic resistance level. 

Considering the euro decline almost all day long, the MACD indicator moved to the sales area, where it is still situated. However, bearing in mind complexity of the situation, it is recommended to open short position only after hitting the 1.3315 area and its confirmation by the indicator. 

The key resistance and support levels for today:

Support levels: 1.3315, 1.3293, 1.3269

Resistance levels: 1.3352, 1.3388, 1.3412

50-day moving average (yellow line) – 1.3386

30-day moving average (green line) – 1.3374 

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Risks. Any analyst’s opinion, studies, analysis or other information released in this analytical review were provided as market’s comments, not calls for action. Analyst is not responsible for any profit, loss or damages that may be directly or indirectly triggered by the usage or this information.

Contact this analytical review’s author: maksim.magdalinin @ analytics.instaforex.com