The Euro, which came under duress against the USD yesterday evening has so far been unable to find any semblance of strength in today’s early afternoon session. The currency pair continues to face steep resistance at $1.25445. The Federal Reserve, thanks to the FOMC Meeting Minutes has implied that the days of a loose monetary policy are over, which is undoubtedly beneficial for the Greenback.
The Fed additionally mentioned that it will not be concerning itself with global growth concerns, since it firmly believes that these issues will not affect the overall strength of the U.S. economy. Furthermore, the Eurozone PMI data failed to impress, falling below an estimate of 51.3 and once again raises questions concerning the overall strength of the Eurozone economies.
It is widely expected that the ECB will introduce its bond buying program by as early as December, whereas the Fed may start raising interest rates by the early part of next year. This divergent policy stance between these two central banks of course has negative ramifications for the Euro.
When looking at the hourly chart for the EUR/USD, the currency pair is currently trending lower and it should take support at the $1.24708. Its momentum indicators are providing a sell signal denoting a shift towards the sell side. Additionally its relative strength index is trending lower, pointing towards strong selling momentum. Lastly it is imperative to state that the EUR/USD is trading below its daily moving average.
Short the EUR/USD at current levels for an intermediate target at $1.24708, with a strict stop-loss above $1.25445