Today, on April 30th, the common European currency is currently trading in a narrow price range against the US Dollar. The price is currently fluctuating around 1,3807. The decline was caused by the fact that Germany's inflation rate turned negative (-0,31%). Germany is the biggest economy in the eurozone and the EU. So, it is not accidental, that the reaction of the common European currency was like that.
Yet, today we are going to see some more major events, including the eurozone's inflation report and the FOMC interest rate decision. Indeed, these events are going to be the key market drivers today. A the same time, the Fed is going to announce whether it is going to keep tapering QE3 in May.
So it is not accidental, that the currency pair is currently shooing no major moves and is consolidating in advance of these major events. The thing is that market participants have turned risk-averse and are waiting till the situation clarifies. Indeed, it is difficult to make decent trading decisions in advance of such news. The 2-day FOMC meeting will end today and the committee members will announce their decisions. This will be followed by Janet Yellen's press conference.
Some experts assume that the Fed is likely to keep tapering QE3 in May. In particular, the bond purchase program is expected to be cut by $10bn/m more. If this is the case, QE3 will be reduced to $45bn a moth spent on bonds. At the same time, they do not expect any changes in interest rates this time.
Forex: EURUSD Prospects
According to the comprehensive tech analysis of EURUSD made by the experts working for Masterforex-V Academy, the H4 chart indicates that the currency pair is currently consolidating within the scope of the 1,3783-1,3879 price range. The range is market with 2 green lines.
The forthcoming breakout will define the direction of the next momentum. If the price goes below the bottom the range, the bias will turn bearish, especially if supported by the forthcoming news we have just mentioned. If this is the case, the next levels of support will be found at 1,3761 and 1,3736. If they are broken, we may well expect the price to try and test 1,3700.
Alternatively, if the common European currency manages to show some strength and is supported by positive fundamental data, we are likely to see the price breaking above the top of the range (1,3879). If this is the case, the next targets will include 1,3905, pivot MF 2 and the bigger-scale local high. Those levels are represented by the red lines.
