Yesterday's trading session was entirely bearish. The currency pair was going down continuously, thereby setting new local lows one after another. The latest downswing was seen instantly after the FOMC published meeting minutes.
According to the minutes, the US economy is recovering at a moderate pace. The economic activity in the USA restored completely in Q2 2014. The American economy is currently seen more investment inflows as the US labor market has already recovered up to the pre-recession level.
At this point, all economic sectors seem to be improving. However, the US housing sector is still lagging behind the rest of the crowd. The rate of inflation is currently located close to the target set by the Federal Reserve.
Meanwhile, the Fed has cut the QE program by $10bn more this months. Meanwhile, the central bankers say that if the economic figures for August match their expectations along with stable inflation and employment close to projected levels, the Fed will keep on tapering the QE program at the same rate. Meanwhile, interest rates are not expected to be raised until 2015, the minutes say.
USD Index
According to Masterforex-V Academy, the US Dollar continued its strengthening against the common European currency and other majors amid positive meeting minutes released by the Fed. This made EURUSD decline down to another local low at 1.3241.
Still, today's trading session started with a recovery in the market of EURUSD. At this point, it has already recovered up to 1.3277.
The H1 chart of EURUSD shows us that the currency pair is still developing a bearish trend started from 1.3432. For now, this is a 3-wave count. The 3rd way is still underway. It started going down from 1.3411. At this point, it is between 176.4 % and 200 % of the preceding move – wave 1 - 1.3432-1.3335.
The price is currently developing a recovery from 1.3241. So far, it has been viewed as a bullish reaction since the 3rd wave is incomplete yet. The closest levels of resistance are the MF sloping channels seen in the graph below. The closest level of support is 1.3244.
